Online media exchange

ABSTRACT

A data processing system enables a network of interconnected public access computers ( 250 ) to act as a continuous transactional exchange for electronic advertising. The system customizes paid advertising, enabling dynamic pricing and price discovery. The system provides extensive real-time tracking which supports a hybrid pay for performance model as well as a process for multi-stage optimization.

CROSS REFERENCE TO RELATED APPLICATIONS

[0001] This application claims the benefit of U.S. provisionalapplication 60/206,944, filed 25 May 2000, the content of which isincorporated by reference. This application claims the benefit ofInternational Application number PCT/US01/16927 having an internationalfiling date of 24 May 2001.

BACKGROUND

[0002] The explosion of Internet activity over the past few years hascreated enormous growth for advertising on the Internet. The currentmarket is however is very fragmented (many buyers and sellers who cannotfind each other), inefficiencies and non-transparency exist (tradinginformation, especially pricing information is often hidden from theparticipants).

[0003] The Internet operates on a client/server model. In this model, aclient computer communicates with a server computer on which informationresides and the client computer depends on the server to deliverrequested information and services. These services may involve handlingincoming and outgoing email, providing advertisements, and conductinge-commerce. Other examples of these services are searching forinformation and sending it back to the client (such as when a databaseon the Web is queried), and delivering web pages for a web site. Theservers (also known as hosts) are usually more powerful computers thatstore the data and databases.

[0004] The web sites that make up the World Wide Web need to have uniquelocations so that a client computer can locate them to request servicessuch as retrieving email, files, web pages, and other information. Theunique identifier for a host computer is called an IP (InternetProtocol) address and the unique identifier for a web site (web page) iscalled the URL (Uniform Resource Locator). A URL indicates where thehost computer is located, the location of the web site on the host, andthe name of the web page and the file type of each document, among otherinformation.

[0005] A common form of Internet advertising is known as banner ads.These banner ads are frequently seen stretching across the top of a webpage. Many large sites, such as Alta Vista, Yahoo, and CNN, host bannerads. Typically, there are three parties involved in making banneradvertising work.

[0006] An advertiser is someone trying to build a brand name (branders)or to sell a product or service (direct marketers). For example, themarketplace knows that Dell sells computers and Price Waterhouse sellsaccounting services. Advertisers develop individual ads or groups ofcoordinated ads called campaigns. The text and artwork comprising an adare known as the ad copy and creative respectively. Advertisers need tohave these ads distributed so that consumers will see them. For thisdistribution, they rely on publishers.

[0007] A publisher provides content that consumers want or need. Forexample, the New York Times provides news, ZDnet provides computerinformation, Disney's Go Network provides entertainment content. Contentattracts consumers. Publishers make space available next to theircontent to sell to advertisers.

[0008] In this context, a consumer is anyone with Internet access, suchas a web browser. A consumer visits a site to see the content providedby the publisher. While there, the consumer is attracted to an ad andclicks on it to see more information. The act of clicking normallydirects the consumer's browser to the advertiser's web site, as shown inFIG. 2. There, the consumer can find information, register to get evenmore information, download trial software, or purchase merchandise.Advertisers get paying customers resulting from the distributed ads.Publishers get paid for their ad inventory. Consumers get content (oftenpaid for by the advertisers).

[0009] 2.1 Advertising Trading Models

[0010] In traditional advertising, there is one primary way to selladvertising space such as a column in a newspaper, a page in a magazine,a radio or television spot, or a billboard. An advertiser may buy fivecolumn inches, a quarter page, or a 30 second spot. In all cases, thespace for an advertisement is bought and sold.

[0011] Internet advertising started out in much the same way. Theprimary space on the Internet for advertising is the impression. Animpression refers to a consumer viewing an ad on a publisher's page. Iften consumers visit the same page and see the same ad, then tenimpressions have been delivered. To make advertising more effective, thebanner for a particular page usually rotates. This means that one ofmany different ads may appear each time the web page is viewed. Sincethe value of a single impression is small, a deal between a publisherand an advertiser may involve millions of impressions. The cost for thisspace is known as cost per thousand impressions or CPM. CPM rates rangefrom just a few dollars to several dollars. However, the Internetprovides a unique opportunity for trying other models of sellingadvertising space, and other models have already begun to emerge. Threedifferent models are discussed below, CPM, CPA, and Inverted CPA. Thefollowing figure (FIG. 12) describes the abstract steps followed in eachmodel, and thus highlights their differences.

[0012] 2.2 CPM Model

[0013] The goal of advertisers is sales and/or branding. The goal of thepublishers is to sell their ad inventory at the best price. Buying andselling ad inventory according to impressions is a legacy of traditionaladvertising media, where it was difficult or impossible to measure theeffectiveness of the advertising. The price a publisher can charge isaffected by the perceived effectiveness of the advertising. For example,publishers can say that their audience includes some number of peoplewith some specified characteristics. These people are assumed to belikely to buy the particular product being advertised. Advertiserscurrently predict the effectiveness of the advertising using historicaldata, test marketing, and guess-work. This is then used to predictreturn-on-investment (ROI) and to negotiate terms with a publisher. Thenegotiations are complicated by inconsistencies in definition (e.g.,when, exactly, is an impression considered to be delivered), and theneed to qualify ad delivery by parameters including:

[0014] 1. Guaranteed delivery of a specific number of impressions withina certain time.

[0015] 2. Frequency (how many times a single viewer will see the ad in acertain period).

[0016] 3. Location of the ads on a site and within a page.

[0017] 4. Target audience specification. Note that publishers cannotguarantee that only the desired audience will see the ads to a consumerviewing an ad on a publisher. In order to have some control over theirROI in the CPM model, advertisers are forced to contractually obligatepublishers to deliver their ads according to these specific parameters.

[0018] On the other hand, publishers need to estimate how much of theiravailable inventory matches the advertiser's specifications so that theyknow how much to sell. This is not always easy, since the categories areoverlapping. Publishers should implement tools and processes to satisfyadvertisers that the requested specifications are being met. Thisinvolves choices of ad serving technology, gathering data about theiraudience, and organizing the layout of their pages. To maintain controlover their site and audience, publishers impose constraints onadvertisers regarding the size, type, and animation qualities of theircreative executions. Publishers are concerned that their audience willbe alienated by ads that are too distracting or slow to load.

[0019] The traditional CPM approach leads to a short-term misalignmentbetween the interests of the advertisers and those of the publishers.Once a publisher has sold their inventory to an advertiser, they areless concerned about the effectiveness of the advertising. They haveless motivation to help the advertiser be more effective. Of course, inthe long run, publishers should be concerned. If the advertising ontheir site is continually ineffective, advertisers will be reluctant toplace ads on their site.

[0020] Typically (see FIG. 12), the steps involved in the CPM buyingmodel are:

[0021] 1. The advertiser approaches publishers with a request forproposal, or a publisher approaches advertisers with a rate card. Ineither case, this is a proposal to do business.

[0022] 2. The advertiser and the publisher negotiate on the specificterms for the deal. In all media, this is a complicated process.

[0023] 3. After the deal is consummated, the advertising space is usedas contracted.

[0024] 4. After the advertisements appear, the advertiser pays for thedelivery.

[0025] The Internet has made it easier to determine the effectiveness ofadvertising. The possibility of directly measuring actions andassociating these actions with a particular advertisement creates apowerful mechanism for aligning the interests of advertisers andpublishers. Such a model would alleviate or eliminate much of thecomplexity associated with the CPM model.

[0026] 2.3 CPA Model

[0027] Another way for advertisers to pay publishers is on a performancebasis, that is, the cost per action (CPA) model. Under this model, theadvertiser only pays when the advertising generates a measurable result.Today, many CPA deals measure performance by counting the click-throughsthat a particular ad generates. A few services, including the system ofthe present invention, measure events beyond the click, such asregistrations, software downloads, and sales.

[0028] Selling advertising media on a per-action basis aligns theinterests of both the advertisers and the publishers. Publishers aremotivated to do whatever they can to improve the effectiveness of theadvertising. This type of payment works best with direct marketers whoare trying to achieve some measurable response, rather than branders whoare only trying to increase name recognition.

[0029] Typically (see FIG. 12), the steps involved include:

[0030] 1. A publisher offers ad space to advertisers at a particularperformance rate.

[0031] 2. Advertisers accept the offer.

[0032] 3. The ads are run, and the performance is measured.

[0033] 4. Advertisers pay for the results measured.

[0034] The CPA model shifts risk from the advertiser to the publisher.If the advertising does not work, the publisher does not get paid. Theconventional CPA model does little to compensate the publisher for theadditional risk. The inverted CPA model, described below, addresses thisissue.

SUMMARY

[0035] 3.1 Inverted CPA Model

[0036] In the CPM and conventional CPA models, advertisers select from apool of publishers competing for their ad dollars. To compensate thepublisher for accepting the additional risk of CPA payment, the invertedCPA model provides publishers with a pool of advertisers to choose from,and provides publishers with further control over the advertising thatis placed on their site. In the CPM model, publishers are not concernedabout the particular advertisements that are placed on their site, aslong as they do not contain objectionable material.

[0037] In the inverted CPA model, publishers choose which media (e.g.,ads) they want to appear on their site, because they will get paid onlyif those ads are effective. The effectiveness of the media may bemeasured using CPM, CPA, CPC, and the like.

[0038] In the inverted CPA model, the present invention inverts thetraditional roles of buyer and seller. In the CPM and CPA models, pricenegotiation begins with publishers. In the inverted CPA model, it beginswith advertisers. Advertisers create offers comprised of the creativeand the price they are willing to pay for any action that may result.These offers are listed on the exchange system. Publishers review theseoffers and select the ones that are most appropriate. Thus, thecommodity that is bought and sold on the exchange system is really apromise by the advertiser to pay for the actions resulting from apublisher placing the ad on their site.

[0039] The abstract steps (shown in FIG. 12) are:

[0040] 1. An advertiser offers to pay publishers at a particularperformance rate.

[0041] 2. Publishers accept offers.

[0042] 3. The serving of the creatives occurs pursuant to specifiedconstraints including time, volume, monetary amount and the performanceis monitored.

[0043] 4. The advertiser pays for the results measured. The Internetprovides the environment in which these various models can co-exist andcompete with each other. The competition will strengthen and reward thesuccessful models. Multiple competing models may continue to exist, eachserving their own market niche.

[0044] The method and system of the present invention introduce anexchange (like NASDAQ), coupled with a unique business model, to thischaotic market. The exchange reduces fragmentation by providingaggregation, increases efficiency by providing commoditization, andcreates transparency by providing unbiased market-determined pricing.The method and system of the present invention change the current salesparadigm by inverting the traditional sales of buyers and sellers.Advertisers make offers that publishers can accept or reject. Thesystem, based on the delivery of results flowing from the actions on theads rather than the mere renting of the ad space, aligns the interestsof both advertisers and publishers to further energize the market.

[0045] In one embodiment, the “many to many” environment of the exchangesystem of the present invention creates a potentially unlimited numberof registered Advertisers with the ability to make potentially unlimitednumbers of variable offers to compensate a potentially unlimited numberof registered Publishers for actions performed as a result of media runon Publishers' sites. The Exchange environment commoditizes the buyingand selling of advertising because any party involved can alter itsposition at any time. For example, Advertisers with accepted offersrunning on Publisher sites can modify the terms or withdraw the offerscompletely from the exchange floor at any time. Similarly, Publishersrunning accepted offers on their sites can remove the ads from the sitesand replace them with offers from any Advertiser on the Exchange at anytime. The “contracts” created are liquid in that there is no fixedduration, no fixed Publisher space that is actually acquired and nofixed price in that either party can modify price or withdraw/reject theoffer. Therefore, by commoditizing the media, the method and system ofthe present invention allow for creation and termination of manyone-to-one contracts between parties in a many-to-many environment, allin real-time. The system is capable of keeping the identity of thepublishers anonymous to the advertisers. Also, the identity of thepublisher may be made known to the advertisers so that certain offersmay be targeted to specific publishers.

[0046] Furthermore, the combination of the exchange and trading modelbrings hitherto non-participating players into the market. This releaseshidden liquidity and increases the market several fold. Reluctantadvertisers are emboldened to participate in a predictable, risk-freeenvironment. Publishers, even tiny ones, can generate revenue from theirunder-utilized ad inventory without the need of a sales force. Anextremely low cost of entry encourages experimentation and participationby both advertisers and publishers regardless of their size. Theexchange provides feedback loops and utilizes network effects to fuel anexponential growth of transactions.

[0047] In one aspect, the system operates like a commissions exchangewhere the fair market value of a commission is discovered. According tothis view, publishers are considered as affiliates or as a dynamicoutsourced sales force for an advertiser/merchant. These affiliates orresellers are paid primarily by a commission on the sales they generate.Typical affiliate sales programs have previously been static and longterm. The exchange allows the affiliate relationship to be dynamic, andhence responsive to changing conditions in real-time.Publisher/Affiliates can simultaneously have relationships with severalmerchants at the same time and can dynamically adjust theserelationships to maximize their yield. Moreover, because the pricesbeing paid are determined by supply and demand, the commission is notfixed and reflects the fair market value of the relationship.

[0048] In one aspect, the system operates like a commissions exchangewhere the fair market value of a commission is discovered. According tothis view, publishers are considered as affiliates or as a dynamicoutsourced sales force for a advertiser/merchant. These affiliates orresellers are paid primarily by a commission on the sales they generate.Typical affiliate sales programs have previously been static and longterm. The exchange allows the affiliate relationship to be dynamic, andhence responsive to changing conditions in real-time.Publisher/Affiliates can simultaneously have relationships with severalmerchants at the same time and can dynamically adjust theserelationships to maximize their yield. Moreover, because the pricesbeing paid are determined by supply and demand, the commission is notfixed and reflects the fair market value of the relationship.

[0049] 3.2 Inverted CPA Advertising Exchange

[0050] The system “inverts” the traditional CPM and more recentlyadopted CPA models (the “inverted CPA model”) to “commoditize”advertising space and create a highly efficient method of business viaan exchange. This section outlines how the exchange works. The idea ofusing an exchange to obtain a high degree of trading efficiency hasalready gained wide exposure on the Internet. For instance, Chemdex(TM)trades bulk chemicals, Band-X(TM) trades Internet bandwidth,FastParts(TM) trades electronic parts, and National TransportationExchange trades available cargo space on trucks.

[0051] The invention implements a centralized exchange (see FIG. 13),preferably as a website. Advertisers and publishers join the service byfirst registering. Advertisers describe their demographic,psychographic, geographic, and economic requirements in an offer.Similarly, publishers describe the demographic, psychographic, andgeographic parameters of each page, area, or channel of their website.As shown below, through the system advertisers are able to instantlysubmit for viewing by all publishers any number of offers on theexchange. Advertisers may also instantly remove offers from theexchange, even though such offers may have already been accepted by andserved on publisher sites. Similarly, publishers may instantly acceptand, through the system, begin serving the media on their sites, as wellas instantly reject any and all previously accepted offers. The systemtracks the actions performed for the advertisers for each and everyoffer, and resultant compensation due to the publishers for each andevery offer. The advertiser can specify incentives that includedistribution fees (CPM-based), click through fees (CPC-based), leadgeneration fees (CPL-based) and action-related fees (CPA-based).Publishers are compensated for events generated at the rate specified bythe advertiser incentives. For instance, advertisers may want to selldifferent products, test different creative ads, or try a variety ofdifferent incentive levels. Publishers are able to review and acceptthose offers in real time via the exchange. As soon as an offer isaccepted, the system starts serving the corresponding ad, which appearson the publisher's page(s). A single offer can be accepted by as manypublishers as are registered on the exchange. This is a substantialenhancement for advertisers as it extends the reach of the ad andincreases the likelihood that the media will achieve the desiredactions, all without risk to the advertiser. Since advertisers only payfor results, there is little to no concern about how many or whichPublishers accept the offer(s) placed on the Exchange. To the publisher,the exchange facilitates the liquidation of unsold inventory at noadditional incremental cost thereby optimizing the advertising revenueyield for a website. In addition, the exchange brings potentiallyundiscovered advertisers (or advertisers willing to pay only via theexchange system) to publishers for no added cost. The result is anefficient liquid market on both sides. An exemplary process is depictedin FIGS. 3-9.

[0052] The inverted CPI model shifts risk and aligns the interests ofall parties. Since advertisers pay only for effective advertising, theirrisk is—reduced and their return on investment (ROI) is predictable. Theinversion brings advertisers to publishers, making an expensivepublisher sales force unnecessary.

[0053] 3.3 Value Proposition

[0054] The invention provides multiple benefits to both advertisers andpublishers. The exchange system saves time, effort, and money for allparticipants. It also provides opportunities for optimization that havepreviously been unavailable. The exchange system also adds value foradvertisers and publishers by substantially increasing their efficiencyin three ways:

[0055] 1. The exchange's central marketplace brings together advertisersand publishers with complementary requirements.

[0056] 2. The structured commodity allows for the immediate consummationof deals, rather than a time-consuming and expensive bilateralnegotiation.

[0057] 3. Price discovery provides advertisers and publishers with thesecurity that they are dealing at a fair market price.

[0058] One aspect of the present invention is a method and systemproviding a dynamic real-time automated exchange for buying, selling andtrafficking commoditized media while providing real time performancereporting and buyer/seller optimization modules. Once a contract betweenan advertiser and a publisher is established, the system and method ofthe present invention automates the advertiser-publisher relationship bytrafficking media (such as serving ad banners), tracking relatedactivities (such as sales, leads generated or click-through), providingmedia or inventory performance feedback, monitoring and detection offraud as well as the collection and distribution of commissions. Thisaspect also describes a web-based, business-to-business, e-commerceinfomediary for the Internet advertising market.

[0059] In one embodiment of the present invention, the Internetinterface devices 220 a-220 n typically include a central processingunit (CPU) 223 for processing and managing data; and a keyboard 224 andoptionally, a mouse or a pointing device 225 for inputting data. A mainmemory 227 such as a Random Access Memory (RAM), a video memory 228 forstoring image data, and a mass storage device 231 such as a hard diskfor storing data and programs are also included in a typical personalcomputer (PC). Video data from the video memory 228 is displayed on thedisplay screen 230 by the video processor 229 under the control of theCPU 223. A communication device 232, such as a modem or a wirelesscommunication device, provides access to the Internet 221. Optionally,one or more of Internet interface devices 220 a-220 n may be connectedto a local network 234. An Input/Output (I/O) device 226 reads data fromvarious data sources and outputs data to various data destinations. Insome embodiments of the present invention, the Internet interfacedevices may be simplified for cost and space purpose to omit one or moreof the above components. For example, one or more of the mouse,keyboard, and disk may be omitted or combined with other components toachieve lower cost or smaller size. Servers (hosts) 222 a-222 m are alsocomputers and typically have architecture similar to the architecture ofInternet interface devices 220 a-220 n. Generally, servers differ fromthe Internet interface devices in that servers can handle multipletelecommunication connections at one time. Usually, servers have morestorage and memory capabilities, and higher speed processors. Someservers (hosts) may actually be several computers linked together, witheach handling incoming web page requests. In one embodiment, each server222 a-222 m has a storage medium 236 a-236 m, such as a hard disk, a CDdrive, and the like for loading computer software. When a software suchas the software responsible for online media exchange according to thepresent invention is loaded on the server 222 a, an off-the-shelf webmanagement software or load balancing software may distribute thedifferent modules of the software to different servers 222 a-222 m.Therefore, in one embodiment, the computer program responsible forexecuting the present invention resides on one or more servers.

[0060] An exemplary web site location 235 is shown on server 222 a inFIG. 1. In one embodiment of the present invention, the advertisers andthe publishers interact with the system by accessing web site 235 asdescribed below in more detail. The web site 235 has a unique addressthat is used by the users to access server 222 a (in this example) andthe web site location on the server 222 a. The computer software forexecuting the steps of the present invention may also reside on the website 235.

DESCRIPTION OF THE DRAWINGS

[0061] For as better understanding of the nature, objects, and processesinvolved in this invention, reference should be made to the detaileddescription taken in conjunction with the accompanying drawings, inwhich:

[0062]FIG. 1 illustrates a client-server computer network (e.g., theInternet) constructed in accordance with an embodiment of thisinvention.

[0063]FIG. 2 illustrates an example processing operation to server andtrack advertisements in accordance with an embodiment of this invention.

[0064]FIG. 3 illustrates an example user interface process that anadvertiser executes in accordance with an embodiment of this invention.

[0065]FIG. 4 illustrates an example processing operation that anadvertiser executes in accordance with an embodiment of this invention.

[0066]FIG. 5 illustrates a processing operation for an advertiser fromthe exchange operator's point of view in accordance with an embodimentof this invention.

[0067]FIG. 6 illustrates an example user interface process that apublisher executes in accordance with an embodiment of this invention.

[0068]FIG. 7 illustrates an example processing operation that apublisher executes in accordance with an embodiment of this invention.

[0069]FIG. 8 illustrates a processing operation for a publisher from theexchange operator's point of view in accordance with an embodiment ofthis invention.

[0070]FIG. 9 illustrates a processing operation for billing andaccounting in accordance with an embodiment of this invention.

[0071]FIG. 10 illustrates an example system architecture which may beused in accordance with an embodiment of this invention.

[0072]FIG. 11 illustrates processing operations undertaken byadvertisers, publishers, and the exchange operator in accordance with anembodiment of this invention.

[0073]FIG. 12 illustrates several advertising negotiation and paymentmodels in accordance with an embodiment of this invention.

[0074]FIG. 13 illustrates a processing operation for a many-to-manyexchange in accordance with an embodiment of this invention.

[0075]FIG. 14 illustrates how dynamic pricing influences impressionvolume and reach of an advertisement in accordance with an embodiment ofthis invention.

[0076]FIG. 15 illustrates a system architecture in accordance with anembodiment of this invention.

[0077]FIG. 16 illustrates a exchange website architecture in accordancewith an embodiment of this invention.

[0078]FIG. 17 illustrates a detailed website architecture specific toadvertisers in accordance with an embodiment of this invention.

[0079]FIG. 18 illustrates an example advertiser home page graphical userinterface in accordance with an embodiment of this invention.

[0080]FIG. 19 illustrates an example offer management web page inaccordance with an embodiment of this invention.

[0081]FIG. 20 illustrates an example offer editor web page in accordancewith an embodiment of this invention.

[0082]FIG. 21 illustrates an example banner management web page inaccordance with an embodiment of this invention.

[0083]FIG. 22 illustrates an example banner editor web page inaccordance with an embodiment of this invention.

[0084]FIG. 23 illustrates an example URL management web page inaccordance with an embodiment of this invention.

[0085]FIG. 24 illustrates an offer state transition diagram inaccordance with an embodiment of this invention.

[0086]FIG. 25 illustrates a contract state transition diagram inaccordance with an embodiment of this invention.

[0087]FIG. 26 illustrates a physical network diagram in accordance withan embodiment of this invention.

[0088]FIG. 27 illustrates a system architecture in accordance with anembodiment of this invention.

[0089] Like reference numerals refer to corresponding parts throughoutthe several views of the drawings.

DETAILED DESCRIPTION

[0090]FIG. 1 shows a block diagram of a typical Internet client/serverenvironment used by advertisers, publishers and consumers in oneembodiment of the present invention. Internet interface devices 220a-220 n are connected to the Internet 221 through the communicationlinks 233 a-233 n. Optionally, a local network 234 may serve as theconnection between some of the Internet interface devices 220 a-220 n,such as the Internet interface devices 220 a and the Internet 221.Servers 222 a-222 m are also connected to the Internet 221 throughrespective communication links. Servers 222 a-222 m include informationand databases accessible by Internet interface devices 220 a-220 n. Inone embodiment of the present invention, a computer program for onlinemedia exchange resides on at least one of the servers 222 a-222 m and isaccessible by the advertisers and publishers using one or more of theInternet interface devices 220 a-220 n.

[0091] 5.1 System Architecture

[0092] In one embodiment, the architecture of the system includes fivemajor components: the Web server 390, the ad server 401, the applicationserver 392, the database 443, and the accounting package 382. Thearchitecture for one embodiment of the exchange system is set forth ingreater detail below. Moreover, the architecture for another embodimentof the System is shown in FIG. 15.

[0093] 5.1.1 Web Servers

[0094] Web servers 390 interact with the system users (i.e., anadvertiser or publisher). The web servers 390 provide the user interfaceto the exchange service. It is the only component that knows about theprecise details of the user interface. The Web servers 390 are generallyunder a light load and do not have severe real-time constraints.

[0095] 5.1.2 Application Servers

[0096] The application servers 392 house all the business logic of thesystem. There are two primary functions of this component. The first isto provide editing and management functions for all the objectsassociated with the advertiser arid the publisher. The second is toprovide the automation necessary to have a dynamic real-time negotiationsystem. This includes functions for filtering and matching the offers tothe publishers. Multiple applications servers can be used within thesystem architecture. Some application servers 392 can be used forspecific tasks (e.g., for customer support functions).

[0097] 5.1.3 Database

[0098] The database 443 is the repository of all the persistent data inthe System. One embodiment uses an object-oriented database for thispurpose since it provides a direct mapping to the objects used in therest of the system.

[0099] 5.1.4 Ad Servers

[0100] The ad servers 401 are in charge of serving up the ads whenrequested by the end-user. The ad server 401 has been designed to befast and efficient by caching all required data in random access memory.For example, if the ad server 401 were to not serve up the requested adin a timely fashion, it would result in a broken GIF, which coulddetrimental to the business reputation. The ad server 401 is thereforevery robust. In order to maintain real-time control over the ads beingserved, the invention maintains direct control over the ad server 401.

[0101] There are multiple ad servers 401 to handle the load. Each adserver 401 is independent of all the others with the ability to serveall the ads by itself. In one embodiment, hardware load balancers areused to balance the load among the ad servers 401.

[0102] The database 443 communicates with the ad servers 401 via the adserver controller 441. When there is any change in the ads, theinformation is passed from the database 443 to each of the ad servers401 via the ad server controller 441. The ad server controller 441instantaneously communicates new advertising to the ad servers 401 uponnew trades taking place in the exchange.

[0103] 5.1.5 Measurement

[0104] The ad server 401 is also responsible for gathering theinformation about various actions or events that take place related tothe ad that has been served. For example, the ad server 401 isresponsible for receiving all click-throughs and redirecting them totheir appropriate targets. It is also responsible for receiving allnotifications of sales or other actions. These events are then handedoff to the log servers 442 as soon as possible. It is the responsibilityof the log servers to make sure that the events are logged and thenrecorded in the database 443.

[0105] 5.1.6 Accounting System

[0106] All the online, real-time accounting information is stored in thedatabase 443 and reported to the customer on demand. Periodically, allthis information is aggregated and sent to the accounting package 382whose responsibility it is to keep track of what has been is billed,owed, and received. The accounting package 382 is the interface to theexternal world of billing.

[0107] 5.2 Advertiser and Publisher

[0108] This section describes an advertiser's and a publisher'sexperience using one embodiment of the present invention.

[0109] Advertisers (see FIGS. 3-5)

[0110] 1. Advertisers register 280 for access to the service and thesystem verifies their credit-worthiness 306.

[0111] 2. Advertisers create accounts 263 to organize their campaigns.

[0112] 3. Advertisers create campaigns 284. They specify the actions forwhich they will compensate publishers. If they pay solely forimpressions and/or clicks, nothing more is necessary. If they want topay by registrations, downloads, or sale, the system provides the toolsnecessary to track such actions and measure compensation due topublishers.

[0113] 4. Advertisers create offers 294, 295 within a particularcampaign. The parameters of an offer are described in the“Commoditization” section.

[0114] 5. Advertisers monitor 411 an aggregated view of the responsesfrom publishers. Based on the feedback, they can dynamically adjust theoffer. For instance, they can modify their creative or change theincentives.

[0115] 6. Advertisers monitor 412 the offers as the ads run in realtime, thereby maximizing the efficiencies provided by the exchange.Unlike a static contract (e.g. binding on both publisher and advertiserfor a fixed space on a web site for a set amount of time) whereunder-performance cannot be reversed, the exchange system utilizesinstantaneous fluid contracts allowing either party to enhanceperformance. Either party can terminate contracts that are not achievingthe desired end results.

[0116] 7. Advertisers can rapidly achieve the optimal market price foradvertising any given product through the exchange. For example,advertisers can start with elevated offers to compensate publishers, andthen systematically reduce these amounts incrementally until the preciseintersection between supply and demand (i.e. market price at any givenpoint in time) is achieved.

[0117] 8. Advertisers can also moderate the amount they are willing tooffer as compensation to publishers depending on their own productioninventory levels. For example, an advertiser with excess productioncapacity or aging inventory may decide to increase the incentive forcompensation (thereby increasing the cost of goods sold and loweringmargins) to publishers to increase the reach to accelerate sales.Conversely, advertisers having difficulty keeping up with demand mayelect to reduce incentives on offers to publishers in order to reducereach and corresponding sales volume.

[0118] At the end of each month, advertisers receive a bill for theactions that their ads have generated. Advertisers pay their bill. Anexemplary billing process is depicted in FIG. 9.

[0119] Publishers (see FIGS. 6-8) Procedures followed by and/or featuresand benefits offered to publisher by the system include:

[0120] 1. Publishers register 340 for access to the service.

[0121] 2. Publishers input 342 into the system detailed psychographic,demographic and geographic profiles, and content taxonomy of each page,area and/or channel of their web site. This information is for use inmatching (through an indexing process) the most compatible advertisersfrom a revenue-generating standpoint.

[0122] 3. In one embodiment a manual process 334 with automated supportverifies that the site does not contain questionable or potentiallyoffensive content.

[0123] 4. Publishers create areas 324 to represent different parts oftheir site that they have integrated 344, 416 with the exchange.

[0124] 5. Publishers specify preferences 415 for the kinds ofadvertising that they want to host. One embodiment includes publisherspecified restrictions on:

[0125] 5.1. creative properties, such as their dimensions, size inbytes, and whether or not they can be animated.

[0126] 5.2. minimum acceptable incentive level.

[0127] 5.3. minimum Effective CPM (“ECPM”) based on all active accepted

[0128] 5.4 offers running on the exchange.

[0129] 5.5. minimum expected flight time (the dates that the advertisingcampaign will run).

[0130] 5.6. modification to the offer, such as changes in flight time,creative, match indices

[0131] 6. Publishers can specify how they want to handle theadvertisers' offers that meet their filtering criteria 418. They canspecify trading rules to automate actions that they want performed whencertain criteria are met. For example the publisher can:

[0132] 6.1. Automatically 415 accept all offers that meet theircriteria. For instance, if the publisher has been sufficiently satisfiedwith an advertiser in the past, the publisher can instruct the system toaccept all future offers from that advertiser that meet specificrestrictions. In this way offers can be automatically accepted in anunattended mode.

[0133] 6.2. Manually 417 review the offers that meet their criteria. Asthe creative and product offering are difficult to characterize, thisoption allows the publisher to obtain more information about an offerbefore deciding whether to accept or reject it.

[0134] 7. Accept an offer with conditions 418. For instance, thepublisher may indicate that the offer is accepted unless the advertiserchanges the creative, product offer, or incentives. If the advertisershould change one of these parameters unacceptably, the publisher willautomatically stop accepting the offer. In this way offers can beautomatically rejected in an unattended mode.

[0135] 8. Provide feedback 329 to the advertiser on accepted or rejectedoffers. For instance, a publisher may reject an offer but communicate tothe advertiser that the offer would have been accepted if the creativewere different or the incentives were higher.

[0136] 9. Reject the offer with no specified cause 329.

[0137] 10. Select the system's automated process of accepting and/orrejecting offers submitted to the exchange through dynamic configurablebusiness rule definition 415 and/or parameter selection.

[0138] One embodiment of the audience/content match index methodproduces a number between 0 and 100 indicating the degree of the matchbetween the advertiser's requested target and the publisher's availablemedia, with larger numbers indicating better matches.

[0139] Once an offer is accepted by a publisher, the correspondingcreative is immediately sent to and automatically served by the system'sad servers 401. Publishers may manually or automatically adjustparameters dynamically to bias the selection of advertisements (e.g.give ads different priorities with a system of weights, incorporatefrequency capping, preferentially show certain ads at certain times ofday).

[0140] If the selection of an advertisement (offer) fails to yield aresult, there was no appropriate ad that the system could select. Inthat case, the system allows the publisher to specify alternativestrategies. One strategy might be for the system to choose among a setof publisher-specified creatives. Another strategy might be for thesystem to choose among a pool of exchange-maintained creatives. Thesecould be used to implement a banner barter service. Yet another strategymight be for the system to redirect to a publisher-specified third-partyad server.

[0141] Publishers review ads (contracts) 419 as they are running. Theycan manually or automatically drop ads that are not performing well(i.e. low ECPM). Alternately, they can specify minimum performancecriteria, and the system will automatically drop ads that do not meetthe specified criteria. In one aspect, the publishers are paid byexchange provider for the actions directly attributable to ads they haveserved. In one embodiment, the ECPM is defined as a method ofrepresenting cost performance of media across advertiser, channel, orglobally.

[0142] 5.3 Advertiser Integration

[0143] Advertiser integration is used to measure compensatable events.An important property of said integration is that it functions with anyand all existing or future publishers that the advertiser may trade withon the exchange. This implies that advertisers need integrate only oncewith the exchange to report the delivery of compensatable events.

[0144] Advertisers can define arbitrary types of compensatable events aslong as they can detect the occurrence of said event and providenotification to the ad servers 401. One embodiment of the above methodis to embed a 1×1 transparent pixel in the “thank you” page of theadvertiser that communicates the event (e.g. lead, download, sale) tothe ad server 401. For example, after the end-user buys an item on theadvertiser's site, they are shown a “thank you” page that informs themabout their purchase. The viewing of that page causes the 1×1transparent pixel to be fetched from the ad server 401, thus notifyingthe ad server 401 of the sale. Strategies are used in conjunction withproprietary technology to reduce the potential of fraud in the system.

[0145] Another embodiment is to install a software module on theadvertiser's network that communicates events directly to ad servers401. A skilled practitioner would immediately recognize that suchcommunication may be encrypted and authenticated for increased security.A skilled practitioner would further recognize that standard techniquescould be employed to enable guaranteed delivery of messages on thiscommunication link.

[0146] Another embodiment is to use a proxy HTTP server to rewrite HTMLtags to allow the tracking of activity on a advertiser's site withoutrequiring any modifications to that site.

[0147] The requirements for the advertiser integration include:

[0148] 1. An advertiser should only need to integrate once for each kindof action they need to report. They should not have to re-integrate foreach publisher that they work with.

[0149] 2. The solution should work on a static web page.

[0150] 3. The solution should be able to track repeated actions from thesame customer to enable the exchange to compensate the publishers in theform of residuals over of the lifetime of the customer.

[0151] In order to discuss the solution, more context about the problemis needed. There are four distinct entities involved in delivering adsand measuring actions.

[0152] 1. The exchange operator that does the ad serving and recordsmeasured actions.

[0153] 2. The publisher (sometimes known as the Content Provider) thatdelivers content containing ads. Each ad the publisher serves has acontract id that uniquely identifies the agreement between theadvertiser and the publisher.

[0154] 3. The advertiser that places ads to drive traffic to their ownsite where they detect and report events observed to the exchangeoperator.

[0155] 4. The consumer that uses a browser 250 to visit publisher sites,click on ads to visit advertiser sites, and generate actions that theadvertiser detects and reports.

[0156] One embodiment of the solution uses the following steps:

[0157] 1. The consumer visits the publisher, sees an ad, and clicks onthe ad. This directs their browser to the exchange operator's ad server401 using a request that identifies the publisher and ad.

[0158] 2. The exchange operator's ad server 401 records the click,redirects the consumer's browser to the advertiser's site based on theunique identifier in the original request. The ad server 401 alsodefines a “cookie” on the browser that binds the advertiser's identifierto the contract id for this ad served by the publisher.

[0159] 3. The consumer navigates through the advertiser site. Upongenerating an action, the advertiser embeds a request for an invisiblepixel on the page next sent to the consumer (e.g. the thank you page forregistering). The request for the invisible pixel directs the browser toget the image data from the exchange operator's server. The requestcontains specific information about the action performed by theconsumer.

[0160] 4. The exchange operator's ad server 401 receives the request forthe invisible pixel, along with the consumer's browser cookie bindingthe advertiser's id to the appropriate contract id. If the binding doesnot exist, this may simply indicate that the event was generated from aconsumer that did not follow an ad to the site. The exchange operator'ssystem records the action on the appropriate contract. The ad server 401sets another cookie with an event signature to prevent multiple requestsfor the image from causing double counting of events (multiple requestsfor the image can occur from browser refresh, back button, printerfunctions, etc.). A timeout on the signature allows residual payments tooccur.

[0161] The information that the advertiser includes in the requestincludes:

[0162] 1. The advertiser id.

[0163] 2. The event id (e.g. lead, download, sale).

[0164] 3. In the case of a sale, there is additional informationregarding the value of a sale so that advertisers may compensatepublishers by a percentage of the value of the sale.

[0165] 4. A string provided by the advertiser that is not directly usedby the exchange operator (it is treated as opaque data) but can beuseful in an audit. For instance, an advertiser may include an order idfor a sale.

[0166] Since none of this information is particular to a publisher, theintegration, is independent of the publishers that the advertiser isworking with. All the events can be generated by a request on a staticpage. Signatures and timeouts control counting for residual payments topublisher. Therefore, this solution satisfies the three requirementspresented at the beginning of this section.

[0167] 5.4 Publisher Integration

[0168] Publisher integration is used to enable the selection anddelivery of advertising creative to the media content consumer. Animportant property of said integration is that it functions with any andall existing or future advertisers that the publisher may trade with onthe exchange. This integration must allow the publisher to communicatesufficient information to the ad server 401 in order to effectivelyselect an appropriate offer. Furthermore, the integration may beindependent of the creative media type and format that will be delivered(e.g. images, streaming media). The integration may also be independentof the creative media used to deliver publisher content (e.g. web,email, wireless).

[0169] This onetime integration may allow the delivery and measurementof impressions and clicks from network nodes other than the exchange adservers 401. This is achieved by redirecting the request for thecreative to the selected network node.

[0170] The redirection is based on a combination of parameters such as:network topology, current bandwidth amount and costs at the variousnodes, and publisher or advertiser preference. Said network node may beunder the administrative control of the advertiser, the publisher, or athird party.

[0171] One embodiment of this integration utilizes a Combination of HTMLIFRAME tags and JavaScript. In this embodiment, if the consumer'sbrowser supports the IFRAME tag, said tag is used. If said browser doesnot support IFRAME tags, but does support JavaScript, JavaScript is usedto insert the HTML into the web page at the desired location. If saidbrowser does not support JavaScript, a default creative is selected fordisplay.

[0172] Publishers need to integrate in order to present advertising totheir content readers. The constraints for the solution are:

[0173] 1. A publisher should only need to integrate once for eachpage/area they wish to present advertising in. A publisher can use thesame tags for all their pages if they don't need to partition their siteinto sub-areas or pages into subparts for separate measurement.

[0174] 2. The solution should work with a large segment of installedbrowsers (Internet Explorer and Netscape Navigator).

[0175] 3. The solution must allow banners to “rotate,” meaning that eachtime a page is viewed, the banner can change.

[0176] When requesting a banner from the ad server 401, a specificpublisher will include their publisher id “pubid”, area id “areaid”, andthe desired creative dimensions “<dimension>”. The identifiers are notof any particular form and need not be in the order used in thefollowing examples.

[0177] Fundamentally, we wish HTML had a tag that looked like: <ad src=http://<host>/<pubid>/<areaid>/<dimension>“>

[0178] This would return a response containing the creative data, suchas the bytes representing an animated GIF file, and a header directiveindicating what should happen if the user were to click on the creative.Unfortunately, HTML does not have any such tag. Normally, in HTML whenwe wish to display an image that may be clicked on, a construct like thefollowing is used: <a href=“...”><img src=“...”></a>

[0179] This directs the browser to display an image within an “anchor”tag which directs where the browser should go if the image is clickedon. Unfortunately, if the img tag returns a “rotating” banner, then thedestination in the anchor would have to match. There is no direct way tomake this happen. Therefore, we need a construct that will generate orfetch this image/anchor pair, or else we need to use some scheme thatwill keep the required binding of image/anchor pair using somecombination of browser and server memory. The latter is expensive andhas many known problems with the solutions uncovered thus far.

[0180] We chose to use a technique to fetch the desired tags from theserver. Once again, it is unfortunate that the browsers do not adhere toa standard way to do this. For Internet Explorer, we use an IFRAME, butfor Netscape Navigator, we must resort to JavaScript. Both techniqueseffectively work like an “include directive” specifying that the HTML ininclude comes from a remote server. For a browser that does not supportthese techniques we use a “noscript” tag. Using these techniques, theidealized solution looks like: <IFRAMEsrc=“http.//<host>/laver/<pubid>/<areaId>/<dimension>”> <SCRIPTlanguage=javascriptsrc=“http://<host>/layer/<pubid>/<areaid>/<dimension>”> </SCRIPT><NOSCRIPT></NOSCRIPT> </IFRAME>

[0181] Unfortunately, although Internet Explorer should ignore tagsbetween an “<IFRAME> . . . </IFRAME>” pair, it does not in this case. Itmakes the request to the server but does nothing with the result. Thispointlessly increases the load on the ad servers 401. Therefore, we usea technique of using JavaScript to generate the desired JavaScript. Thismakes all browsers do more work but the end result is that InternetExplorer stops contacting the ad servers 401 while Netscape Navigatorcontinues to do so.

[0182] There are other parameters that are included in the “IFRAME” tagto make the result look correct. These include “marginwidth”,“marginheight”, “width”, “height”, “frameborder”, and “scrolling”. Wealso try to make use of the “NOSCRIPT” section to allow the server touse is various techniques for delivering a non-rotating ad to browsersthat do not support “IFRAME” or JavaScript. In one embodiment, this isthe final result: <IFRAMEsrc=http://<host>/layer/<pubid>/<areaid>/<dimension> marginwidth=“0”marginheight=“0” width=“468” height=“60” frameborder=“0” scrolling=“no”><SCRIPT language=javascript> document.write(′<SCR\IPT>language=javascript src=“http://<host>/layer/<pubid>/<areaid>/<dimension>”></SCR\IPT>′);</SCRIPT> <NOSCRIPT> <a href=“http://<host>/noscriptClick/<pubid>/<areaid>/<dimension>”> <img src=

[0183] This solution satisfies the three requirements defined it thebeginning of this section.

[0184] 5.5 Dynamic Trading

[0185] All of the system's trading is dynamic and real-time. Theexchange system provides real-time reporting to both the advertisers andthe publishers. Advertisers monitor each of their offers in real-timeand get immediate feedback on any changes that they make. Publishersmonitor the yield of the various areas on their site and get immediatefeedback on changes. Previously, advertisers and publishers had to waitfor up to a week to get any reports and could not readily associatechanges in results with any changes they may have made. The real-timereports from the system allow advertisers and publishers to respondeffectively to changed circumstances. This helps to cut losses in losingsituations and increase gains in winning situations.

[0186] The ability to monitor the results immediately and changeparameters dynamically allows on the fly testing of advertising. Theeffect of changes, such as different creatives, different productoffers, and different incentives, can by tested and measuredefficiently. Ultimately, the instant monitoring and dynamic controlsblur the line between ad testing and full ad runs: they are both thesame.

[0187] The dynamic nature of the trading allows for automated testing ofvariables impacting the effectiveness of advertising. One example ofsuch a test would be an advertiser specifying three different creatives,three different product price points, and three different incentivelevels. The resulting twenty-seven individual offers may beautomatically generated and run for comparison.

[0188] Advertisers dynamically control their risk profile by adjustingtheir incentives (e.g. shifting payment from impression to saledecreases risk). Publishers can control risk by adjusting acceptance andrejection criteria for offers.

[0189] 5.6 Commoditization

[0190] Commoditizing a product is a key ingredient for an efficienttransactional exchange. A commodity can be described by a common set ofparameters. If the values of these parameters alone is sufficient for abuy/sell decision, then the product has been fully commoditized. If aproduct is only partially commoditized, buyers and sellers can bematched efficiently, but a trade cannot be consummated creating aninformational, rather than a transactional, exchange. A fullycommoditized product permits efficient matching and trading. If thematching can be fully automated, a trade may occur as soon as a bid issubmitted.

[0191] The inverted CPA model increases the commodization andfungibility to such a degree that trades can execute immediately on atransactional exchange. The commodity is represented by an advertiser'soffer. One embodiment of such a commoditized offer includes: ParameterExample Value Creative A GIF or JPEG image (the banner ad itself)Product Offer Download of Adobe Software Flight time Jun. 1 to Aug. 31,1999 Max Pay-out $15,000 Compensation Per click $0.05 Per download $1.00Publisher Computers/Software Content

[0192] The advertisers may set a maximum pay-out associated with aparticular offer. When the maximum dollar amount is reached, the ad isautomatically pulled so that it will no longer appear on any publishers'sites.

[0193] Advertisers and publishers control the scope of potential tradesby specifying inclusion and exclusion lists. These lists indicate whichparties may or may not participate in this trade. One embodiment ofthese lists uses domain names and/or target profiles to specify thecontra-parties. These lists can be manipulated to change therelationships between advertiser and publisher. In one extreme, they canbe used to limit a trade to a one-to-one relationship.

[0194] By allowing trades to execute immediately, commoditizationeliminates the time and energy wasted on lengthy bilateral negotiations.Allowing ads to be withdrawn instantly once an advertising budget isexhausted promotes efficiencies to the Publisher. Through the exchangesystem, Publishers can now offer unsold/unused space to the populationof advertisers on the Exchange. Under the CPM model, website space ispurchased for a fixed period of time, regardless of whether the campaignis effective and/or the advertiser has achieved the desired end result.

[0195] 5.7 Reporting

[0196] All the data from the ad servers 401 is collected, summarized,and analyzed to provide a wide variety of reports available toadvertisers and publishers. These reports provide transparency to theactivity on the exchange allowing the participants to make informeddecisions. Users can also download raw data with which to generate theirown reports.

[0197] The reporting system 394 uses the collected information for datamining. This process computes useful statistics (e.g. conversion ratios,effective cost per event, activity) over various views of the system(e.g. advertisers, publishers, areas, offers, channels, or the entireexchange), aggregated over several temporal granularities (e.g. day,week, month to date).

[0198] A specific metric, ECPM, is defined as the value of an entity perthousand impressions delivered (e.g. the ECPM of an offer is the dollarsspent divided by thousands of impressions delivered). This varies basedon events measured and incentive levels. Two variants of ECPM arecomputed: past and future. Past ECPM is based on observed activity interms of compensation levels and processed events. In one embodiment,future ECPM is computed based on processed events which providehistorical conversion ratios and current incentive levels.

[0199] ECPM is used to provide a single metric for comparing similaroffers with different incentive levels in the exchange.

[0200] 5.8 Dynamic Control and Price Discovery

[0201] A feature of the present invention allows both the advertisersand the publishers to have complete, continuous, and rapid control overall aspects of the buy/sell process. All accepted offers are monitoredcontinuously by the system, and the results are dynamically updated. Theraw data includes impressions served and events recorded. Other usefuldata, such as conversion ratios and ECPM are derived from the raw data.In one embodiment, the conversion ratio is defined as the ratio of thenumber of actions performed to the number of impressions served togenerate said actions. The system allows for different definitions ofthe conversion ratio. This performance data can be used by bothadvertisers and publishers to evaluate the performance of the acceptedoffer.

[0202] As described above, advertisers may monitor and modify theiroffers dynamically. If their offer is not being accepted by an adequatenumber of publishers, an advertiser can increase the incentives beingoffered to attract more publishers. This allows advertisers to controlthe exposure they get via price modifications. FIG. 14 graphicallydepicts a simplified benefit of dynamic price control through theexchange system of the present invention. Horizontal lines representadvertiser incentives offered. The area in the triangle above a pricingline represents the number of publishers that accept incentives at orbelow that level. If the advertiser on the left sets the incentive at$2, only a small number of publishers will accept their offer. If theyset it at $5, more publishers are likely to accept their offer.

[0203] Conversely, if the ads generate an acceptable number of actions(and hence ad revenue to the publishers), publishers will continue torun the ads. If the actions resulting from running particular ads arepoor, publishers can instantly drop those underperforming ads from theirsites. The invention provides an automated mechanism for publishers tospecify under which conditions they want a particular ad accepted ordiscontinued. This allows a publisher to have dynamic control (whethermanually or through automated processes) over the ads they accept and/orterminate.

[0204] Similar to a stock market ticker, the price, embodied as ECPM, isavailable continuously. Such is not the case with periodic auctions.Rapid control over the price allows the market forces of supply anddemand to come into play and dynamically determine the fair market valueof the advertising media during any snapshot in time. Both buyers andsellers can rest assured that they are getting the most optimal dealthrough the most efficient means at any given time.

[0205] 5.9 Automation

[0206] As described above, the exchange system automatically filters andmatches advertiser offers to the most appropriate publishers. Theresults are provided to each individual publisher in rank order. Thissignificantly reduces the amount of work the publisher has to do inselecting appropriate offers. To ease the burden of having tocontinually monitor changes in accepted offers, the system allowspublishers to specify the conditions under which they would accept orreject particular offers. For example, a publisher can specify that ifan accepted offer is paying out less than $2 effective CPM, it should bedropped immediately. The result is a maximized yield requiring minimalcost and effort on the part of the publisher.

[0207] The automation provided by the system also benefits advertisersby commoditizing their advertising needs and matching their offers withpublishers willing to host their ads. Advertisers can adjust theiradvertising reach by changing the incentives in their offer. Thisautomation enables advertisers and publishers to engage in a highervolume of transactions. Dynamic monitoring and reporting provides thenecessary controls to manage the increased volume effectively.

[0208] Feedback from advertising performance and automated yieldmanagement dynamically uses a process similar to natural selection toterminate offers that are underperforming. The matching and filteringtechnologies include techniques and software to increase the likelihoodof an effective match. In one embodiment, the whole process is automatedand optimized. The automation in specifying the accept/reject conditionsmay be a simplified automated agent. Alternatively, the system iscapable of using more sophisticated matching schemes based on ECPM, theintended ECPM, conversion rates, and/or ROI calculations. The agentarchitecture also provides automation for expanded negotiations.

[0209] Additionally, agent APIs and protocols allow external softwareagents to be plugged into the system. This has the advantage thatnegotiation algorithms can be totally under the control of the customer.Optimization tools are also provided for optimizing the advertisers' ROIand managing yields for publishers. For example, the optimization toolprovides optimization of the advertiser's ROI based on one or more of:number of impressions served on an offer, number of click throughs,number of publishers who accepted an offer, cause for rejection ofoffers by advertisers, and ECPM of the offer. Publishers' yields aremaximized based on one or more of number of impressions served, ECPM ofthe offer, and click through rate. One embodiment of the publisher'syield optimization method is to continually accept all offers for anumber of impressions and then reject all but the top performing offers.An exemplary diagram for the automated process is shown in FIG. 15.

[0210] 5.10 Overview of One Embodiment

[0211] Key objectives are:

[0212] 1. Provide a smart affiliate exchange mechanism that facilitatesthe industry's specific requirements. The exchange automates thenegotiation process as much as possible and simplifies the advertiser'sand publisher's site programming requirements.

[0213] 2. Operate at acceptable performance levels.

[0214] 3. Provide accurate and auditable accounting information.

[0215] 4. As a mission-critical component, the site strives for minimumdowntime. The ad servers 401 are the most mission critical components.They should be capable of responding to requests at all time and atadequate performance levels. This is accomplished through redundancy andfail-over mechanisms. The system does not allow unauthorized access, orallow users to corrupt the database 443.

[0216] 5. Provide a user friendly and intuitive interface for all of thesite's visitors (advertisers, publishers and unregistered guests)

[0217] 6. Facilitate scalability through modular design.

[0218] 7. Ensure security under password protection mechanisms.

[0219] 8. Accommodate future enhancements, through a modular design.

[0220] The following sets forth descriptions and certain key aspects ofthe invention's functionality:

[0221] 1. Exchange: facilitates a trading floor for affiliate programs.A meeting place for advertisers and publishers for the purpose ofestablishing a (temporary and dynamic) affiliate relationship.

[0222] 2. Trading Hub: facilitates serving of banners and tracking ofall ad related transactions

[0223] 3. Financial Module: responsible for the generation of statementsand invoices as well as handling of accounts receivable and accountspayable. Preferably, the module operates as a standalone unit with databeing exchanged manually between the web site and the financial module.

[0224] 4. Operations: provides all necessary tools for the operation ofthis mission critical site.

[0225] 5.10.1 Exchange

[0226] When an offer is accepted by a publisher, a contract (AcceptedOffer) is formed. However, this contract may be terminated at the willsof each party, or when the conditions specified in the contract anddetected by the system are reached. In one embodiment, a contractincludes: offer, bid (manual or automated), rejection criteria by thepublisher (a publisher can decide to manually review each offer, or havethe system automatically accept all new offers matching the specifiedcriteria), definition of the area in which the media is posted, and thelike.

[0227] The following key functions are provided:

[0228] 1. Viewing of the trading floor: The system provides aggregatestatus information about the trading floor. This information isprimarily used as a marketing tool.

[0229] 2. Management of offers and their associated components: Offerscan be constructed and modified to meet market dynamics. Obsolete offersare removed from the system

[0230] 3. Management of acceptances/rejections of traded offers:Acceptances/rejections of traded offers can be constructed and modifiedto meet market dynamics

[0231] The Exchange module supports different matching processes. Forexample it can support manual or automatic matching. When usingautomated matching of (advertiser issued) offers and (publisher issued)bids, publishers are notified via the alert mechanism of such matches.Actual acceptance of related offers may be done manually orautomatically, depending on the publisher's preferences. The matchingalgorithm will provide users with the functionality to specify thosecompanies with which they (a) are willing to engage in transactions(so-called “inclusionary” categories, such as predeterminedcomplimentary channel buys) and (b) are not willing to engage intransactions (so-called “exclusionary” categories, such as directcompetitors of advertisers or products/services) that would offend theaudience of publishers.

[0232] 5.10.2 Trading Hub

[0233] The following key functions are provided:

[0234] 1. Serving of banners for active affiliate relationships

[0235] 2. Tracking (monitoring and logging) of all trade transactions.The system tracks all predefined events. Currently such events include:

[0236] 2.1. Impressions

[0237] 2.2. Click-throughs

[0238] 2.3. Leads (user definable)

[0239] 2.4. Sales

[0240] 3. Monitoring of start and termination conditions of activeaffiliate relationships. The system checks for start (e.g. user definedstart time) and end conditions (e.g., user defined maximum impressions).

[0241] 4. Monitoring and delivery of user- and system-defined alerts.The system checks for user-defined (e.g.: ‘accept until’) andsystem-imposed alert conditions (e.g.: credit limit exceeded).

[0242] In one aspect of the invention, the system logs ail of theevents, tracked by the tracking servers, as well as other events,initiated within the exchange module, within a transactional database443. A log server handles the logging of the advertiser external events.The log server is responsible for, among other functions, the following:

[0243] 1. Validation of events, based on conditions stored in thedatabase 443. Due to delays inherent in the system, some reported eventsmight not be valid any longer. Such events are not stored within thetransactional database 443.

[0244] 2. Monitoring for Aoffer- and account-associated thresholds. Thefollowing thresholds are being monitored:

[0245] 2.1. Number of served banners

[0246] 2.2. Number of sale events

[0247] 2.3. Advertiser-specific cost

[0248] 2.4. Credit levels (for advertisers) When thresholds areexceeded, the logging servers will trigger “state” transitions whenappropriate, as explained below.

[0249] 3. Depending on the criticality of the events being monitored forthreshold conditions, the logging, server will activate a throttlingmechanism, for banner serving.

[0250] 4. Logging of all events to the transactional database 443. Allevents are time-stamped.

[0251] 5.10.3 User Interface

[0252] Users interface with the exchange via a client-server (typicallyweb-based) mechanism.

[0253] The web site contains three areas (sub-sections) that facilitateinteraction with the exchange (see FIG. 16). These are:

[0254] Advertiser subsite

[0255] Publisher subsite

[0256] General information about the trading floor

[0257] The functionality of these sub-sites is described below.

[0258] 5.10.3.1 Advertiser Sub-Site

[0259] 5.10.3.1.1 Advertiser Sub-Site Architecture

[0260] The advertiser's sub-site (see FIG. 17) is implemented as anextranet. Using the login name and system stored user profile, thesystem identifies the user as an advertiser and displays their privatehome page. The sub-site contains user-specific data. All futureactivities For this user are handled from this sub-site.

[0261] Pages in this site include three areas:

[0262] Header area—displays client company name and user name

[0263] Left navigation bar—contains selection buttons/indicators whichallow the user access various areas within his/her sub-site.

[0264] Main Area—displays function-specific data. Contents of this areaare defined through the selection in the left navigation bar.

[0265] Footer area—displays local time, based on the user profile

[0266] Pages may contain promotional material. Promotional material iscontext sensitive and is controlled by authorized staff.

[0267] 5.10.3.1.2 Page Architecture

[0268] 5.10.3.1.2.1 Advertiser Home Page

[0269] Page architecture is shown in FIG. 18.

[0270] Main Frame—displays account-specific data:

[0271] 1. Current month-to-date statistics

[0272] The system maintains several user-specific free-running countersthat count events and accrued dollar values. Two sets of counters aremaintained: daily and monthly. Current month-to-date values comprisesthe sum of the monthly counter and the current daily counter.

[0273] Fields are defined as follows:

[0274] 1.1. Month-to-date number of impressions:

[0275] Total number of impressions served for the advertiser (driven bymultiple accepted offers)

[0276] 1.2. Month-to-date number of click-throughs:

[0277] Total number of clicked-through impressions for the advertiser(driven by multiple accepted offers)

[0278] 1.3. Month-to-date number of leads:

[0279] Total number of leads for the advertiser. Leads areadvertiser-defined events and are detected at the advertiser-site andtracked by the exchange provider's web site.

[0280] 1.4. Month-to-date number of sales:

[0281] Total number of sales for the advertiser. Sales are detected atthe advertiser site (“thank-you” page) and tracked by the exchangeprovider's web site.

[0282] 1.5. Month-to-date accrued sales:

[0283] Total dollar value of commissionable sales. Commissionable salesare advertiser defined and make up part of the offer, in general,commissionable sales may include the value of an advertised product orthe total amount of the shopping cart.

[0284] 1.6. Month-to-date accrued commissions:

[0285] Total dollar value of commissions, due to all of the publisherswho have a contract with the advertiser.

[0286] Clicking on the title for any of the statistics will display apop-up screen with a term definition for that field.

[0287] 2. Financial summary for the last three months

[0288] Same information as in the ‘current month-to-date’ statistics,gathered for the last three months (not including the current month).Additional information includes: previous balance, amount earned/spentduring the month, payments/distributions during the month, and newbalance.

[0289] 3. List of current advertiser-specific offers

[0290] Tabular summary information, containing a list of the currentadvertiser specific offers. Information for each offer includes:

[0291] 3.1. Offer name

[0292] 3.2. Number of times reviewed (since last modification)

[0293] 3.3. Number of current acceptances

[0294] 3.4. Number of current rejections

[0295] 3.5. Number of impressions (since last modification)

[0296] 3.6. Number of click-throughs (since last modification)

[0297] 3.7. Number of sales (since last modification)

[0298] 3.8. Return on Investment (“ROI”) calculation

[0299] Under normal system operation, the displayed values may bedelayed by a few minutes.

[0300] All values displayed are static (i e.: the browser does notrefresh automatically)

[0301] Offers may be sorted by the following user definable criteria:

[0302] 4. Ascending/descending date of last modification

[0303] 5. Ascending/descending ROI

[0304] 6. Ascending/descending number of acceptances followed byAscending/descending number of rejections

[0305] 7. Ascending/descending number of rejections followed byAscending/descending number of acceptances

[0306] 8. Offer category; either product category and/or target audience

[0307] 5.10.3.1.2.2 Offer Manager

[0308] The offer manager web page (see FIG. 19) is entered by clickingon the ‘Manage Offer’ button on the left navigation bar.

[0309] Note: The ‘Manage Offer’ indicator is lit (red). This pageprovides tabular summary information, containing a list of the currentadvertiser specific offers. Next to each offer, the system providesmanagement buttons. Information for each offer is similar to the oneshown in the advertiser's home page and includes:

[0310] 1. Offer name

[0311] 2. Thumbnail of creative

[0312] 3. Number of times reviewed (since last modification)

[0313] 4. Number of current acceptances

[0314] Under normal system operation, the displayed values may bedelayed by few minutes.

[0315] All values displayed are static (i.e.; the browser does notrefresh automatically)

[0316] By clicking on the ‘current acceptances’ field, a pop-up windowwill display a summary of conditions (‘accept until’)

[0317] Offers may be sorted by the following user-definable criteria:

[0318] Ascending/descending date of last modification

[0319] Ascending/descending number of acceptances

[0320] Each offer has the following management buttons associated withit:

[0321] 1. ‘View detail/Edit’—Copy the offer into an ‘editor buffer’ foreither viewing, modification, or use of the offer as a template for anew offer. By clicking on a the button, the user is taken to the ‘OfferEditor’ page.

[0322] 2. ‘Enable/Disable’—Toggle the offer state between ‘enabled’ and‘disabled’

[0323] 3. ‘Delete’—Mark the offer for deletion. This is implemented as acheckbox

[0324] 4. ‘Copy’—Make a copy of the marked offer and name it “Copy of .. . ”. The page has two additional buttons ‘New’ and ‘Submit’

[0325] 5. The ‘New’ button is used to create a new offer. The user istaken to the ‘Offer Editor’ page.

[0326] 6. All changes and commands take effect when the ‘Submit’ buttonis clicked.

[0327] 5.10.3.1.2.3 Offer Editor

[0328] This popup page (see FIG. 20) is entered in one of the followingtwo methods:

[0329] By clicking on the ‘View Details/Edit’ button, associated with aspecific offer in the ‘offer summary’ area of the ‘Manage Offers’ page

[0330] The page will be pre-populated with the details of the selectedoffer.

[0331] By clicking on the ‘New’ button on the ‘Manage Offers’ page.

[0332] All fields within the page will be populated with the defaultvalues

[0333] Offer Details

[0334] This section allows the advertiser to describe the offer

[0335] Offer name—Unique descriptor name.

[0336] Text string.

[0337] Entered as text input.

[0338] Verified for correctness and uniqueness

[0339] Offer start date & time—Flight start date & time (local time)

[0340] Pull-down items.

[0341] Default—current date & time. Selection should be set for currentor future time.

[0342] Verified for correctness

[0343] Product Details

[0344] This section allows the advertiser to describe the product

[0345] Product name—Product descriptor name.

[0346] Text string.

[0347] Entered as text input.

[0348] Product Description—

[0349] Free form text string

[0350] Entered as text input.

[0351] Product Price—Product price

[0352] Optional field. When entered, the system uses it for display ofstatistics such as ‘Total accrued sales’ and ‘ROI’

[0353] Entered as decimal number.

[0354] Banner Details

[0355] This section allows the advertiser to associate a banner with theoffer. The offer can be associated with a pre-defined banner or canspawn a new browser window for defining a new banner, to be used withthe offer.

[0356] Banner name—Unique banner name of a previously defined banner.

[0357] Text string.

[0358] Pull-down selection.

[0359] Alt. tag—Alt tag for the banner.

[0360] Text string.

[0361] Pull-down selection.

[0362] ‘View’ button—Opens a popup window, displaying the creative forthe selected banner.

[0363] ‘New’ button—Opens a pop-up ‘Banner Editor’ window.

[0364] Target URL

[0365] This section allows the advertiser to associate a banner targetURL with the offer.

[0366] URLs are text strings including alphanumeric characters.

[0367] All of the URLs are verified for correct structure.

[0368] External Advertiser Event Definition

[0369] This section allows the advertiser to associate an externaladvertiser event definition with the offer.

[0370] Commission Details

[0371] This section allows the advertiser to define the commissionstructure for the offer. Each activity type is associated withcommission.

[0372] Commissions may be paid for the following:

[0373] Per CPM (thousand impressions) (flat rate: dollar value; format:$xx.xxx)

[0374] Per click (flat rate: dollar value; format xx.xxx)

[0375] Per lead (flat rate: dollar value; format $xx.xxx)

[0376] Per ‘other’ activity (flat rate: dollar value; format: $xx.xxx)

[0377] Per sale. May be paid in one of the following two methods:

[0378]  Flat rate (dollar value; format: $xx.xxx)

[0379]  Percentage of the shopping-cart contents

[0380] Offer Limits

[0381] This section allows the advertiser to define termination eventsfor the offer. Termination events may include:

[0382] End date & time

[0383] Default end time is infinity. End date & time should occur paststart time.

[0384] Verified for correctness.

[0385] Maximum number of impressions

[0386] Maximum number of leads

[0387] Maximum number of sales

[0388] Maximum cost o Minimum ROI

[0389] Target Content Profile

[0390] This section allows tie advertiser to define a content profilefor the ideal publisher, intended to maximize the ROI (and ECPM)

[0391] The section includes a list of attributes and associated checkboxes. The system will be designed such that that the attribute list canbe easily modified by a system administrator.

[0392] Target Audience Profile

[0393] This section allows the advertiser to define a profile for theideal publisher's target audience, intended to maximize the ROI (andECPM)

[0394] The section includes a list of attributes and associated checkboxes. The system will be designed such that that the attribute list canbe easily modified by a system administrator.

[0395] Aoffer Statistics

[0396] This section provides key statistics for each accepted offer,associated with this offer.

[0397] The ‘Offer Editor’ page has several buttons. These are:

[0398] ‘Reset’ button

[0399] Clicking on this button resets the contents of the page to itsinitial state (i.e., original contents of the offer, in case an offerwas edited/reviewed, default values in case of a new offer).

[0400] ‘Cancel’ button

[0401] Clicking on this button closes the ‘Offer Editor’ page, returningthe user to the ‘Offer Management’ page. No changes take place.

[0402] ‘Save’ button

[0403] Clicking on this button closes the ‘Offer Editor’ page, returningthe user to the ‘Offer Management’ page. Modifications to an existingoffer are retained.

[0404] ‘Save-As’ button

[0405] Clicking on this button closes the ‘Offer Editor’ page, returningthe user to the ‘Offer Management’ page. The system will store the offerunder the name given in the in the ‘Offer Name’ field. In case the namewasn't modified, the system will prompt with a dialog box, requestingconfirmation to overwrite the previous offer. When stored under adifferent name, the original offer remains unchanged.

[0406] 5.10.3.1.2.4 Banner Manager

[0407] The banner manager web page (see FIG. 21) is entered by clickingon the ‘Manage Banners’ button on the left navigation bar.

[0408] Note: The ‘Manage Banners’ indicator is lit (red).

[0409] This page provides tabular summary information, containing a listof the current advertiser specific banners. Next to each banner, thesystem provides a ‘delete’ checkbox. information for each bannerincludes:

[0410] Banner name—Unique text string

[0411] Creative—Image

[0412] Dimensions—in pixels; Computed by the system

[0413] Size—in kb; Computed by the system

[0414] Type of image—Static or Animated; Determined by the system

[0415] ‘Banner Name’ and ‘Alt. Tag’ are editable

[0416] Banners can be marked for deletion by using the ‘delete’ checkboxnext to them.

[0417] The page has two additional buttons ‘New’ and ‘Submit’

[0418] The ‘New’ button is used to create a new banner. The user istaken to the ‘Banner Editor’ page.

[0419] All changes and commands take effect when the ‘Submit’ button isclicked.

[0420] 5.10.3.1.2.5. Banner Editor

[0421] This pop-up page (see FIG. 22) is entered by clicking on the‘New’ button on the ‘Manage Banners’ page.

[0422] Note: The ‘Manage Banners’ indicator is lit (orange).

[0423] This page provides tools for the creation of a new banner. Thetools provide the advertiser with the ability to:

[0424] Define a unique banner name

[0425] Upload a creative from the client station and save it on theprovider's server. Browse buttons are provided for is the definition ofsource and destination paths.

[0426] View the uploaded creative

[0427] Calculate the size and dimensions (server side)

[0428] Evaluate attributes (server side)

[0429] Define an Alternate Tag

[0430] The system provides the following additional buttons:

[0431] ‘View’ button

[0432] Opens a pop-up window, displaying the creative for the selectedbanner.

[0433] ‘Calculate’ button

[0434] Populates the ‘dimensions’, ‘size’ and ‘attributes’ fields, basedon the uploaded creative.

[0435] ‘Cancel’ button

[0436] Clicking on this button closes the ‘Banner Editor’ page,returning the user to the ‘Banner Management’ page. No changes takeplace.

[0437] ‘Submit’ button

[0438] Clicking on this button closes the ‘Banner Editor’ page,returning the user to the ‘Banner Management’ page. The new banner isadded to the list of advertiser-defined banners.

[0439] Upon submitting a banner, the system performs the followingchecks:

[0440] Validity of the creative: correct format, allowable banner size

[0441] Uniqueness of the banner name

[0442] 5.10.3.1.2.6 External Advertiser Event Manager

[0443] This page (see FIG. 23) is entered by clicking on the ‘ManageExternal Advertiser Events’ button on the left navigation bar.

[0444] Note: The ‘Manage External Advertiser Events’ is indicator is lit(red).

[0445] This page provides tools for the definition of ExternalAdvertiser Events within the advertiser's site. The tools provide theadvertiser with the ability to:

[0446] Review existing External Advertiser Events

[0447] Modify External Advertiser Event related parameters:

[0448] External Advertiser Event name

[0449] External Advertiser Event IP address

[0450] Each External Advertiser Event entry has a checkbox, allowing theuser to mark it for deletion.

[0451] The page has two additional buttons ‘New’ and ‘Submit’

[0452] The ‘New’ button is used to create a new External AdvertiserEvent definition. The user is taken to the ‘External Advertiser EventEditor’ page.

[0453] All changes and commands take effect when the ‘Submit’ button isclicked.

[0454] 5.10.3.1.2.7 Alert Handier

[0455] The alert handler provides two main functions:

[0456] Manage alerts

[0457] Define which alerts should be reported and which should bemasked.

[0458] Following is a list of reportable alerts:

[0459] Flight-time start (warning and actual event)

[0460] Flight-time end (warning and actual event)

[0461] Impression limit reached (warning and actual event)

[0462] Lead limit reached (warning and actual event)

[0463] Sale limit reached (warning and actual event)

[0464] Dollar value reached (warning and actual event)

[0465] Credit level reached (warning and actual event)

[0466] ROI threshold exceeded (actual event)

[0467] Offer is stale (warning and actual event)

[0468] Define alert handling, other than web-based display and issuanceof e-mails

[0469] View alerts

[0470] A color-coded marker in the advertiser's home page, notifies theadvertiser that new alerts were added to the alert log since the lasttime it was viewed. The alert log uses the following format: Alert DateTime Level Offer/Bid Description 02/08 16:44 Medium Roses 80% of salesreached 02/08 18:23 High Roses 100% of sales reached 04/12 07:23 MediumLaptop 48 hours till end of flight- time 04/14 07:23 High Laptop End offlight-time

[0471] The user can view the log and manipulate its content through thefollowing commands:

[0472] Mark an entry as read

[0473] Mark an entry for deletion

[0474] Clear the content of the alert log. 5.10.3.2 Publisher Sub-Site5.10.3.2.1 Publisher Sub-Site Architecture

[0475] The publisher's sub-site is implemented as an extranet. Using thelogin name and system stored user profile, the system identifies theuser as a publisher and displays their private home page. The sub-sitecontains user-specific data. All future activities for this user arehandled from this sub-site.

[0476] Pages in this site include three areas:

[0477] Header area—displays client company name and user name

[0478] Left navigation bar contains selection buttons/indicators thatallow the user access various areas within his/her sub-site.

[0479] Main Area—displays function-specific data. Contents of this areaare defined through the selection in the left navigation bar.

[0480] Footer area—displays local time, based on the user profile

[0481] Pages may contain promotional material. Promotional material iscontext sensitive and is controlled by authorized staff. 5.10.3.2.2 PageArchitecture 5.10.3.2.2.1 Publisher Home Page

[0482] Main Frame—displays account-specific data:

[0483] Current month-to-date statistics

[0484] The system maintains several user-specific free-running countersthat count events and accrued dollar values. Two sets of counters aremaintained, daily and monthly. Current month-to-date values include thesum of the monthly counter and the current daily counter

[0485] Month-to-date number of impressions:

[0486] Total number of impressions served by the publisher (driven bymultiple accepted offers)

[0487] Month-to-date number of click-throughs:

[0488] Total number of clicked-through impressions served by thepublisher (driven by multiple accepted offers)

[0489] Month-to-date number of leads:

[0490] Total number of leads accrued by the publisher. Leads areadvertiser-defined events and are detected at the advertiser site andtracked by the provider's web site.

[0491] Month-to-date number of sales:

[0492] Total number of sales accrued by the publisher. Sales aredetected at the advertiser site (“thank you” page) and tracked by theprovider's web site.

[0493] Month-to-date accrued commissions:

[0494] Total dollar value of Commissions, due to the publisher.

[0495] Clicking on the title for any of the statistics will display apop-up screen with a term definition for that field.

[0496] Financial summary for the last three months

[0497] Same information as in the ‘current month-to-date’ statistics,gathered for the last three months (not including the current month).

[0498] Additional information includes:

[0499] Previous balance

[0500] Amount earned/spent during the month

[0501] Payments/distributions during the month

[0502] New balance

[0503] List of current publisher-specific accepted offers

[0504] Tabular summary information, containing a list of the currentpublisher specific accepted offers. Information for each accepted offerincludes:

[0505] Accepted offer name

[0506] Number of impressions (since last modification)

[0507] Number of click-throughs (since last modification)

[0508] Number of sales (since last modification)

[0509] ECPM

[0510] Under normal system operation, the displayed values may bedelayed by a few minutes.

[0511] All values displayed are static (i.e., the browser does notrefresh automatically)

[0512] Accepted offers may be sorted by the following user-definablecriteria:

[0513] Ascending/descending date of acceptance

[0514] Ascending/descending ECPM

[0515] Ascending/descending monetary amount of compensation remaining inaccount.

[0516] List of current publisher-specific bids

[0517] Tabular summary information, containing a list of the currentpublisher specific bids. Information for each offer includes:

[0518] Bid name

[0519] Number of times reviewed (since last modification)

[0520] Number of current accepted offers, driven by the bid

[0521] Under normal system operation, the displayed values may bedelayed by few minutes.

[0522] All values displayed are static (i.e., the browser does notrefresh automatically)

[0523] Bids may be sorted by the following user-definable criteria:

[0524] Ascending/descending date of last modification

[0525] Ascending/descending number of acceptances driven by the bid

[0526] 5.10.3.2.2.2 Accepted Offer Manager

[0527] Clicking on the ‘Manage Accepted Offers’ button on the leftnavigation bar enters this page.

[0528] In one aspect of the invention, this page provides tabularsummary information, containing a list of the current accepted offers.Next to each accepted offer, the system provides management buttons.Information for each accepted offer is similar to the one shown in, thepublisher's home page and includes:

[0529] Accepted offer name

[0530] Thumbnail of creative

[0531] Number of impressions (since last modification)

[0532] Number of leads

[0533] Number of sales

[0534] Number of impressions, leads and sales can be displayed as atime-based graph

[0535] Under normal system operation, the displayed values may bedelayed by few minutes.

[0536] All values displayed are static (i.e., the browser does notrefresh automatically)

[0537] Accepted offers may be sorted by the following user-definablecriteria:

[0538] Ascending/descending date of last modification

[0539] Ascending/descending ECPM

[0540] Ascending/descending monetary amount of compensation remaining inthe account.

[0541] Each offer has the following management buttons associated withit:

[0542] ‘View detail/Edit’ —Copy the accepted offer into an ‘editorbuffer’ for either viewing or modification. By clicking on the button,the user is taken to the ‘Accepted Offer Editor’ page.

[0543] ‘Enable/Disable’ —Toggle the accepted offer state between‘enabled’ and ‘disabled’

[0544] ‘Delete’—Mark the accepted offer for deletion. This isimplemented as a checkbox

[0545] The page has an additional button ‘Submit’. All changes andcommands take effect when the ‘Submit’ button is clicked.

[0546] 5.10.3.2.2.3 Accepted Offer Editor

[0547] This pop-up page is entered in one of the following two methods:

[0548] By clicking on the ‘View Details/Edit’ button, associated with aspecific accepted offer in the ‘Manage Accepted Offers’ page. The pagewill be pre-populated with the details of the selected accepted offer.

[0549] By clicking on the ‘New’ button on the ‘Manage Accepted Offers’page. All fields within the page will be populated with the defaultvalues.

[0550] The page includes several items:

[0551] Offer Details

[0552] This read-only section allows the publisher to view the offerdetails

[0553] Offer name—Unique descriptor name. Text string.

[0554] Offer start date & time—Flight start date & time (local time)

[0555] Product Details

[0556] This read-only section allows the publisher to view the offerdetails

[0557] Product name—Product descriptor name— Text string.

[0558] Product Description—Free-form text.

[0559] Banner Details This read-only section allows the publisher toview the banner details

[0560] Banner name—Unique banner name of a previously defined banner.Text string.

[0561] Alt. tag—Alt tag for the banner. Text string.

[0562] ‘View’ button—Opens a pop-up window, displaying the creative forthe selected banner.

[0563] Target URL

[0564] A text string (link) describes the URL. Clicking on the URL willpop up a window, displaying the target URL.

[0565] Commission Details

[0566] This read-only section allows the publisher to view thecommission details

[0567] Per CPM (thousand impressions).(flat rate dollar value; format:$xx.xxx)

[0568] Per click (flat rate: dollar value; format $xx.wxx)

[0569] Per lead (flat rate: dollar value; format: $xx.xxx)

[0570] Per ‘other’ activity (flat rate: dollar value format: $xx.xxx)

[0571] Per sale. May be paid in one of the following two methods:

[0572] Flat rate (dollar value; format: $xx.xxx)

[0573] Percentage of the shopping-cart contents

[0574] Offer Limits

[0575] This read-only section allows the publisher to view thetermination conditions for the offer, set by the advertiser— Terminationevents may include:

[0576] End date & time

[0577] Maximum number of impressions

[0578] Maximum number of leads

[0579] Maximum number of sales

[0580] Maximum cost

[0581] Minimum ROI

[0582] Target Content Profile

[0583] This read-only section allows the publisher to view a contentprofile for the ideal publisher, intended to maximize the ROI (andECPM). The section includes a list of attributes.

[0584] Target Audience Profile

[0585] This read-only section allows the publisher to view a profile forthe ideal publisher's target audience, intended to maximize the ROI (andECPM). The section includes a list of attributes.

[0586] Acceptance Conditions

[0587] This section allows the publisher to define acceptance conditions(follows the current ‘Accept Until’ feature). The section includes alist of attributes and associated checkboxes.

[0588] The ‘Accepted Offer Editor’ page has. several buttons. Theseinclude:

[0589] ‘Reset’ button

[0590] Clicking on this button resets the contents of the page to itsinitial state (i.e.: original contents of the accepted offer, in case anacceptance was edited/reviewed, default values in case of a new acceptedoffer).

[0591] ‘Cancel’ button

[0592] Clicking on this button closes the ‘Accepted Offer Editor’ page,returning the user to the ‘Accepted offer Management’ page. No changestake place.

[0593] ‘Save’ button

[0594] Clicking on this button closes the ‘Accepted Offer Editor’ page,returning the user to the ‘Accepted Offer Management’ page.Modifications to an existing accepted offer are retained.

[0595] 5.10.3.2.2.4 Alert Handler

[0596] The alert handier provides two -main functions:

[0597] Manage alerts

[0598] Define which alerts should be reported and which should bemasked. Following is a list of reportable alerts;

[0599] Flight-line start (warning and actual event)

[0600] Flight-time end (warning and actual event)

[0601] impression limit reached (warning and actual event)

[0602] Lead limit reached (warning and actual event)

[0603] Sale limit reached (warning and actual event)

[0604] Dollar value reached (warning and actual event)

[0605] Offer removed by the system (actual event)

[0606] Offer removed by the advertiser (actual event)

[0607] Compensation changed (actual event)

[0608] Creative changed (actual event)

[0609] ECPM threshold exceeded (actual event)

[0610] Bid is stale (warning and actual event)

[0611] Define alert handling, other than web-based display and issuanceof e-mails

[0612] View alerts

[0613] A color-coded marker in the publisher's home page, notifies thepublisher that new alerts were added to the alert log since the lasttime it was viewed. In one embodiment, the alert log uses the followingformat: Alert Offer/ Date Time Level Bid Description 02/08 16:44 MediumRoses 80% of sales reached 02/08 18:23 High Roses 100% of sales reached04/12 07:23 Medium Laptop 48 hours till end of flight- time 04/14 07:23High Laptop End of flight-time

[0614] The user can view the log and manipulate its content through thefollowing commands:

[0615] Mark an entry as read

[0616] Mark an entry for deletion

[0617] Clear the content of the alert log—

[0618] 5.10.4 State Diagrams

[0619] 5.10.4.1 Offer State Transitions

[0620] Offers can be in the following states (see FIG. 24):

[0621] UserDisabled (initial state). In this state, offers cannot havenew acceptances, nor can they be run.

[0622] Enabled. In this state, offers can be accepted, but cannot berun-typically because the start time of the offer has not been reached.

[0623] Active. In this state, offers can be accepted and also run.

[0624] SystemDisabled. In this state, offers cannot have newacceptances, a-rid are not running. An offer gets into this state onlyvia system events.

[0625] UserAndSystemDisabled. In this state, offers cannot have newacceptances, and are not running.

[0626] Deleted. Marked as deleted. In this state, offers cannot have anynew acceptances ever again and cannot run ever again.

[0627] 5.10.4.2 Contract (AOffer) State Transitions

[0628] Contracts (AOffer) car, be in one of the following states (seeFIG. 25):

[0629] OfferInactive. In this state, the aoffer is inactive because itsassociated offer has become inactive (i.e., any state other thanActive)—No banners will be shown.

[0630] Active. In this state, the aoffer and its offer are active, andbanners will be shown.

[0631] PubInactive. In this state, the aoffer is inactive because thepublisher has disabled the aoffer. The corresponding offer is active. Nobanners will be shown—

[0632] PubAndOfferInactive. In this state, the aoffer is inactivebecause the publisher has disabled the aoffer and the associated offeris inactive. No banners will be shown.

[0633] Deleted. Marked as deleted.

[0634] The initial state may be either OfferInactive or Active,depending on the state of the offer when the aoffer was created.

[0635] 5.10.5 Reporting

[0636] In one embodiment of the invention, a number of reports aregenerated that continuously create opportunities for enhancedperformance to the recipients of the information.

[0637] Reports can be generated on demand or periodically, Examplereports include:

[0638] 1. Average compensation for each product category within mydomain (taxonomy), stratified by its components

[0639] 2. System-wide average ECPM

[0640] 3. Average ECPM per publisher category (as defined by itstaxonomy)

[0641] 4. Per offer, correlation values of publishers who have acceptedthe offer (e.g. 3 publishers from ‘Computers’, 5 publishers -from‘Sport’)

[0642] 5. Average offer compensation (stratified by its components) forall other advertisers within my category (as defined by the advertiser'staxonomy)

[0643] 6. Conversion ratios

[0644] 7. Exchange status including number of advertisers, publisher,offers, active offers, inactive offers, contracts, bids.

[0645] 8. Top ten lists such as highest ECPM offers, highest clickincentive, best converting banners.

[0646] Reports can be generated over various time granularities to viewchanges in performance over time. Example time granularities includelast year, year to date, last. three months, last month, month to date,last week, yesterday, today, or a specific begin and end date/time.

[0647] Reports Can be generated over various channel granularities. Forexample, the performance of an offer can be viewed overall, or theperformance data can be drawn only from activity on sites withparticular content and audience profiles.

[0648] 5.10.6 Calculation of ECPM

[0649] ECPM is a single metric by which the effectiveness of theadvertising can be measured. It is defined as the value of theadvertising divided by the number of impressions served. For apublisher, this is a yield metric which can be used to determine whichadvertising is maximizing dollars earned -for impressions served. For anadvertiser, ECPM can be used to compare the effectiveness of offers thathave identical incentives. This is good for comparing creatives, adcopy, or product price points to see what is generating the bestconversion.

[0650] The ECPM calculation is: (dollar value) / (impressionsdelivered)) * 1000

[0651] For instance, if $25.00 were made on 15,000 impressionsdelivered, this would be an effective CPM of: (25 / 15000) * 1000 =$1.66 ECPM

[0652] 5.10.7 Calculation of Future ECPM

[0653] The concept of “Future ECPM” is only relevant in an environmentwhere the incentives associated with advertising are changing. Thefuture ECPM 138 computed using historical event counts, or conversionratios, and the current incentive levels.

[0654] The computation of future ECPM is: ((predicted value) /(impressions delivered) * 1000

[0655] The “Predicted value” is: Sum(current incentive level *historical event count) for all event types

[0656] For example, “offer a” has an ECPM of $2.12, but if theadvertiser starts paying $0.15 a click, the ECPM of a publisher thatpicks it up after the incentive change will Impressions Clicks LeadsSales Incentive $0.00 $0.10 $1.50 $10.00 Events Measured 100,000 1,25025 5

[0657] be $2.75. For publishers that already accepted the offer, theiroverall compensation will tend towards an ECPM of $2.75.

[0658] 5.10.8 Audience/Content Match Indices

[0659] The goal of the match indices is to provide a single numberbetween 0 and 100 that indicates the “goodness” of a match between anadvertiser's offer and a publisher's area. This index is computed foraudience demographics and for content. The computation is performed oninformation provided by the publishers (content providers) andadvertisers. The advertisers are indicating what content and audiencethe ad will work best with. The publishers are indicating what theircontent and audience makeup is.

[0660] The audience data has weights associated with each data point.This allows advertisers to say how important this audience is to themand publishers to indicate what percentage of their audience makeup hasthis demographic. For instance, we might have three sites as follows(the number in parenthesis as the weight, a number in between 1 and 5):Content Audience site a Auto age 18-25 (3), auto-buyer (1) site b Auto,museum age 35-44 (4) site c Auto age 35-44 (4), auto-buyer (4)

[0661] Now if we have an advertiser offer that looks like the following:Content Audience offer a Auto, museum age 35-44 (3), auto-buyer (5)

[0662] For example, the advertisement is for a luxury automobilemanufacturer using a creative of a couple coming out of an auto in frontof an art museum.

[0663] The resulting match indices are: Content Audience site a 70 35site b 100 50 site c 70 86

[0664] The highest score of 100 indicates an exact match which we onlygot once for the content of site b. The lowest index b we got was 35 itwas non-zero because of the overlap of auto-buyer but the audience isthe wrong age and relatively few of them are auto buyers.

[0665] A significant factor in the development of the algorithm is thatit has to be trivial to compute. Frequently a large number of theseindices have to be computed while a user is waiting. This data is notamenable to caching (the space for the cached values would beprohibitively large) so we need to compute it quickly on-the-fly.

[0666] Another factor in developing the match algorithm was that itsresults had to be similar to what you'd get by “common sense”. This isalso sometimes known as the principle of “least surprise”. So, if thematch index shows that a particular match is better than another, weexpect that a human would also consider the same match to be better.

[0667] The content match algorithm is: 100 * sqrt (#matches /max(length(offerProfile), length(areaProfile)))

[0668] In this way, a large profile (e.g. a publisher that checks mostof the content categories) will dilute the score if an advertiser hasonly selected a few items in the pro-file and vice versa. Since thematching is so sensitive to dilution, we use a square root to getreasonable matches to have scores closer to 100.

[0669] The audience match is slightly complicated by the weights: 100 *sqrt ( sum(adv item weight * pub item weight) / (5 * sum (weights (advprofile))))

[0670] The dilution is handled differently here on the assumption thatan audience member may have more interests than just those specifiedwithout that being detrimental to the quality of the match. However, anadvertiser looking for a large number of attributes does dilute theresult.

[0671] 5.11 Synopsis

[0672] In one aspect, the present invention is a method implemented on acomputer network that allows for media and space for displaying media tobe exchanged in real time between a plurality of advertisers and aplurality of publishers connected to the network by a plurality ofrespective terminals comprising the steps of: a) storing a plurality ofoffers for media spaces submitted by the plurality of advertisers,wherein each offer includes information about the media content, and amonetary compensation structure offered to be paid upon acceptance; b)displaying offers to individual publishers in a rational order throughcorrelated parameters input by advertiser and publisher; c) sortingoffers based on (i) information provided by publishers and advertisers;or (ii) sorting offers for display to individual publishers based ondemographic, psychographic, geographic and other taxonomies input duringthe registration process by advertiser and publisher alike, or (iii)sorting offers on the basis of dollar per action, click-through, lead,distribution or combination thereof d) accepting by the publisher of oneor more of the ordered offers; e) creating an instantaneous “liquidcontract” for the accepted offer; f) serving the media content for thecontracted offer to the publisher's terminal according the informationin the offer; and g) maintaining the status of the contract inaccordance with the information contained in the accepted offer untilmodified by advertiser or rejected by publisher. The method furthercomprises the step of updating the status of the contract based oninformation provided in the offer, the step of allowing the advertiserwho placed the accepted offer to modify the terms of the contract, orthe step of instantly ceasing the serving of media upon a publisher'srejection or a previously accepted offer.

[0673] In another aspect, the present invention describes a methodimplemented on a computer network for providing an exchange for thepurchase of advertising spaces by advertisers from publishers,comprising a) storing offers submitted by advertisers for the purchaseof an advertising space for an advertisement, wherein each offerincludes a description of the advertisement and a compensation rate forthe placement of the advertisement in an advertising space; b) storingconditional offers submitted by publishers for the sale of advertisingspaces, wherein each conditional offer contains acceptance criteria foroffers submitted by advertisers; c) compiling for a conditional offer alist of offers that satisfy the acceptance criteria; d) accepting one ormore offers from the list by a publisher, and e) serving theadvertisement described in the accepted offer when the publisher acceptsthe offer.

[0674] The method further comprises the steps of determining for anoffer the number of acceptances of the offer, outputting the number ofacceptances to the advertiser who submitted the offer, and allowing theadvertiser to modify the terms of the offer, whereby an advertiser maymodify the terms of an offer in order to increase the number ofacceptances of the offer. The method is also capable of performing thesteps of determining for each accepted offer that results in theplacement of an advertisement in an advertising space, the compensationdue the publisher for the placement of the advertisement in theadvertising space, outputting the compensation to the publisher whoaccepted the offer, and allowing the publisher to revoke acceptance ofthe offer.

[0675] In another aspect, the invention describes a networked mediaexchange system for matching and tracking of offers to purchaseadvertising space comprising: a plurality of advertisers' terminals forconnecting a plurality of advertisers to the network for placing aplurality of offers for media spaces; a plurality of publishers'terminals for connecting a plurality of publishers to the network forreviewing the placed offers on the network and selectively accepting oneor more offers; a first server subsystem for arranging the placed offersbased on information provided by each of the plurality of publishers andcreating an instantaneous contract between an advertiser and a publisherwhen the publisher accepts an offer placed by the advertiser; and asecond server subsystem for executing transactions according toinformation provided in the offer.

[0676] In another aspect, the invention discloses a method by which aplurality of advertisers can enter a liquid contract with a plurality ofpublishers which is transparent, fully automated, does not require aone-to-one negotiation, and supports anonymity for the publishers on theexchange. The invention may also be described as a method to turn into acommodity the purchasing and selling of online media, and/or a method toturn into a commodity the purchasing and selling of offline media.

[0677] The invention creates a metric (ECPM) to allow both publisher andadvertiser to not only purchase and sell media at the then-current fairmarket value, but also to use historical ECPM to reasonably predictfuture performance. ECPM may be defined as the creation of a method ofrepresenting cost performance of media across channel, globally or byadvertiser. A feature of the invention is a method to maintain publisheranonymity from advertisers so that CPM transactions (at rates higherthan ECPM) can be maintained with the same advertisers. Another featureof the present invention calculates the return on investment (ROI) atany given period in time for advertisers and decide on behalf ofpublishers through automated processes whether to continue to maintainan active offer.

[0678] In another aspect, the invention includes a process by which thetraditional principles through which a binding contract is formed(offer, acceptance, consideration) is, for purposes of marketefficiencies transformed into a “liquid contract” that allows multipleparties on both sides of the transactions to accept offerssimultaneously, and also terminate accepted offers, and even reacceptedterminated offers.

[0679] In yet another aspect, the invention includes a method by whichthe parties participating in the purchase and sale of media can realizeprice discovery for the space. Under current methods (auction, blindauction, reverse auction, networks, one-to-one negotiations, and/ormarkets) the parties lack full information and lack a method to trulyachieve the fair market value of the space purchased and sold.

[0680] In another aspect, the invention includes a method by which thepurchase and sale of media is facilitated by allowing the advertiser totest the effectiveness and cost of media through the low cost ofentering/exiting contracts, combined with the ability to constantlyalter creative aspects of advertising campaigns.

[0681] It will be recognized by those skilled in the art that variousmodifications may be made to the illustrated and other embodiments ofthe invention described above, without departing from the broadinventive scope thereof. It will be understood therefore that theinvention is not limited to the particular embodiments or arrangementsdisclosed, but is rather intended to cover any changes, adaptations ormodifications which are within the scope and spirit of the invention.

[0682] Certain levels of tracking and logging errors are allowable.

[0683] 5.12 Certain Defined Terms

[0684] Source:

[0685] littp://www.internetadvertising.org/qa/glossary.shtml

[0686] Ad Serving: A software package or a service that responds torequests from browsers to provide advertising content,typically-banners.

[0687] Advertising Network: A group of Web sites which share a commonbanner server. Typically a sales organization which manages the commerceand reporting. An ad network has the ability to deliver uniquecombinations of targeted audiences because they serve your banner or adacross multiple sites.

[0688] Animated GIF: An animation created by combining multiple GIFimages into one file. The result is multiple images, displayed one afteranother, that give the appearance of movement. Very useful forattracting/distracting Web surfers.

[0689] Banner: Typically a rectangular graphic element which acts as anadvertisement on the Web and entices the viewer to click on it forfurther information, typically on the advertiser's Web site.

[0690] Banner Network: See Advertising Network above.

[0691] Branders: Advertisers primarily interested in promoting namerecognition for their brand.

[0692] ClickThrough: The act of clicking on a banner or other ad, whichtakes the user through to the advertiser's Web site. Used as a- counterpoint to impressions to judge the response-inducing power of the banner.

[0693] ClickThrough Rate (CTR): The response rate of an onlineadvertisement, typically expressed as a percentage and calculated bytaking the number of clickthroughs the ad received, dividing that numberby the number of impressions and multiplying by 100 to obtain apercentage. Example: 20 clicks/1,000 impressions=0.02×100=2% CTR.

[0694] CPA: Cost Per Action. The price paid by an advertiser for each“action” that a content site delivers. “Action” may be a sale, a lead, asuccessful form fill-out, a download of a software program or ane-commerce sale of a product. Both the action, price and terms of a CPApurchase are mutually agreed upon by the advertiser and content site andsuch a purchase typically involves a back end tracking system providedby the advertiser that allows the content site to view clicks andactions every 24 hours if they choose to do so.

[0695] CPC: Cost Per Click. The price paid by an advertiser to a contentsite. When buying on a Cost Per Click model, the advertiser and contentsite have mutually agreed that the content site will continue to displaythe advertiser's ad creative until X number of clicks have beendelivered—the amount purchased. This pricing model typically rangesbetween 10 cents CPC up to $2 CPC and as with other forms of onlineadvertising, is dependent on content, audience reached and targeteddelivery—Untargeted being lower priced, targeted to an affluent audiencebeing at the high end of the rate scale.

[0696] CPM: Cost Per Thousand (Roman Numeral) impressions. The pricepaid by an advertiser for a content site displaying their banner 1,000times.

[0697] CPS: Cost Per Sale. The price paid by an advertiser to a contentsite for each sale that results from a visitor who is referred from thecontent site to the advertiser's site. This type of buying model istypically tracked with cookies, where the cookie is offered on thecontent site and read on the advertiser's site at the success page aftersuccessful completion of one transaction/sale. Typical rates/bountiesrange between 5% and 25% of the retail price of the product or servicebeing sold. See also CPA above.

[0698] Creative: The concept, design, and artwork that go into a givenad.

[0699] Demographics: Common characteristics that allow for populationsegmentation. Typical demographic data points include age, gender,postal code, and income.

[0700] Direct Marketers: Advertisers primarily interested in elicitingtangible responses such as sales.

[0701] Effective CPM: A metric for the cost of advertising when it isnot paid entirely by CPM. Computed by dividing the cost of theadvertising by the number of impressions used.

[0702] Effective Frequency: The number of times an ad should be shown toone person to realize the highest impact of the ad without wastingimpressions on that individual.

[0703] Effective Reach: The number of people who will see an ad the mosteffective number of times. The most effective frequency.

[0704] Exposures: See impression

[0705] Frequency: The number of times a given person will see an ad in agiven time period.

[0706] GIF: Graphical Interchange Format. The most common filecompression format for banner ads and most other pictures on the Web.

[0707] Hits: Every time a file is sent by a server, be it text, graphic,video, and so on, it is recorded as a- hit. Not a reliable gauge tocompare different sites, as ore page with five graphic elements willregister six hits when viewed, while a page with no graphics will onlyregister one hit.

[0708] Impression: The Opportunity To See (OTS) a banner or other ad bya surfer. When a page that includes a banner is viewed, it is consideredan impression.

[0709] Interstitial Ads: Web pages that pop up between what the vieweris looking at and what they are expecting to get. More like a TVcommercial than anything else on the Web (at the moment).

[0710] Inventory: The amount of available space for banners on a Website that can be delivered in a given time period. Also known as theamount of gross impressions per month (or clicks if the publisher isselling on a Cost Per Click rate model) available for sale toadvertisers by a Web publisher.

[0711] Link: A hypertext connection between two documents, image maps,graphics, and the like.

[0712] Liquidity: The ability of an asset to be converted into cashquickly and without any price discount. A larger number of buyers andsellers tends to increase the liquidity of a market.

[0713] Pageview: When a Web page is requested by somebody through abrowser. Pageviews are often used to track the number of impressions abanner gets.

[0714] Proxy: A proxy server acts as a cache file for an organization.It is also used where firewalls protect the internal network from theexternal Internet, while continuing to serve Web pages from the inside.

[0715] Psychographics: Common psychological characteristics that allowfor population segmentation. Typical psychographic data points includeopinions, attitudes, and beliefs about various aspects relating tolifestyle and purchasing behavior.

[0716] Reach: The total number of people who will see a given ad.

[0717] Sell-Through Rate: The percentage of banner or other ads sold asopposed to traded or bartered in an ad network.

[0718] Session: A completed visit to a Web site by asurfer/viewer/visitor. A session can start at the home page and lastanywhere from mere moments to hours, depending on the interest thevisitor has in the information, games, and so on, at the site.

[0719] Traffic: The number and types of people who come to a Web site.Measured in many different ways.

[0720] Transaction Model Exchange: A transaction -model exchangeprovides all the information necessary to make a buy/sell decision andperforms the actual transaction. In contrast, an informational modelexchange provides some but not all the information necessary for abuy/sell decision. Therefore, the actual transaction occurs outside ofan informational exchange. The revenue potential of an informationalexchange is limited to subscription fees. Transaction exchange can, inaddition, charge for services related to performing transactions (e.g.,a per transaction commission). Therefore, a transaction exchange can besubstantially more lucrative.

[0721] URL: Uniform Resource Locator. The address of any particular pageon the World Wide Web, seen as www.company.com/page.shtml.

[0722] Note that, we use terms such as “all” or “always” to describecertain aspects of our preferred embodiment. While the preferredembodiment is so limited, the claims are not; rather, the claims arelimited only by their own terms, not by limitations described in thepreferred embodiment.

1. A computer system configured to provide an online media exchange, thecomputer system comprising: a web server configured to provide a userinterface to advertisers and publishers accessing the online mediaexchange; one or more application servers configured to manage dataobjects associated with respective advertisers and publishers andfurther configured to manage online negotiations between advertisers andpublishers regarding placement of advertiser ads on publisher websites;a database in communication with the one or more application servers,the database storing data including the data objects; and one or more adservers in communication with the database, the one or more ad serversconfigured to serve data defining advertiser ads to publisher websites.2. The computer system of claim 1 further comprising: an ad servercontroller in communication with the database and the one or more adservers and configured to convey advertising data from the database tothe one or more ad servers.
 3. The computer system of claim 1 whereinthe one or more ad servers are configured to receive an online requestfrom a consumer, the online request specifying a contracting publisherand an ad; record data regarding the online request; and redirect theconsumer to an advertiser website based on data of the request, theadvertiser website being associated with a contracting advertiser. 4.The computer system of claim 3 wherein the one or more ad servers arefurther configured to: receive a subsequent request from the consumer,subsequent request including data specifying an action performed by theconsumer at the advertiser website; record data regarding the action,the data being recorded in association with contract data linking thecontracting advertiser and the contracting publisher.
 5. The computersystem of claim 1 further comprising an accounting package incommunication with the database, the accounting package configured tomanage billing among the advertisers and the publishers.
 6. The computersystem of claim 1 wherein the web server is configured to receive anoffer from an advertiser.
 7. The computer system of claim 6 wherein theweb server is configured to detect in the offer one or more of creative,a product offer, a flight time, a maximum pay-out amount, a compensationamount, a per click payment amount, a per download payment amount, and apublisher content description.
 8. The computer system of claim 6 whereinthe web server is configured to provide data about responses to theoffer from publishers.
 9. The computer system of claim 6 wherein the webserver is configured to receive modifications to the offer or modifiedoffers.
 10. The computer system of claim 1 wherein the web server isconfigured to receive ad preference data from a publisher for ads to behosted by the publisher.
 11. The computer system of claim 10 wherein theweb server is configured to detect in the ad preference data one or moreof creative properties, a minimum acceptable incentive level, a minimumeffective cost per thousand impressions (ECPM), and minimum expectedflight duration.
 12. The computer system of claim 1 wherein the one ormore application servers are configured to match advertiser offers topublishers.
 13. The computer system of claim 1 wherein the one or moreapplication servers are further configured to match the advertiseroffers to publishers based on a calculated effective cost per thousandimpressions.
 14. The computer system of claim 12 wherein the one or moreapplication servers are further configured to filter the advertiseroffers according to publisher-specified filtering criteria.
 15. Thecomputer system of claim 1 wherein the one or more application serversare configured to monitor and log trade transactions between advertisersand publishers.
 16. The computer system of claim 1 wherein the one ormore application servers are configured to monitor start conditions andtermination conditions of trade transactions between advertisers andpublishers.
 17. The computer system of claim 1 wherein the one or moreapplication servers are configured to determine an effective cost perthousand impressions for trade transactions between advertisers andpublishers.
 18. A computer system comprising: means for storing datadefining an offer to sell advertising media, the data including datadefining a consumer action as a variable input for calculatingcompensation payable to a publisher for purchase of the advertisingmedia; means for storing data defining an offer to purchase advertisingmedia, the data including data defining a consumer action as a variableinput for calculating compensation payable to an advertiser for purchaseof the advertising media; means for comparing the data defining an offerto sell advertising media and the data defining an offer to purchaseadvertising media; means for establishing a contract between anadvertiser and a publisher based on the stored data defining an offer tosell advertising media and the stored data defining an offer to purchaseadvertising media; and means for tracking commissions owed, billed andreceived under the contract.
 19. The computer system of claim 18 furthercomprising: means for storing data defining advertising content to bepresented in the advertising media; and means for serving the datadefining advertising content on the advertising media if the datadefining an offer to sell advertising media meets terms of the datadefining an offer to purchase advertising media
 20. The computer systemof claim 18 further comprising: means for receiving from an advertiserthe data defining an offer to sell advertising media; and means forreceiving from a publisher the data defining an offer to purchaseadvertising media.
 21. A method for operating a computer system, themethod comprising: storing data defining an offer to sell advertisingmedia, the data including data defining a consumer action as a variableinput for calculating compensation payable to a publisher for purchaseof the advertising media; storing data defining an offer to purchaseadvertising media, the data including data defining a consumer action asa variable input for calculating compensation payable to an advertiserfor purchase of the advertising media; comparing the data defining anoffer to sell advertising media and the data defining an offer topurchase advertising media; and establishing a contract between anadvertiser and a publisher based on the stored data defining an offer tosell advertising media and the stored data defining an offer to purchaseadvertising media.
 22. The method of claim 21 further comprising:trafficking media in accordance with the contract.
 23. The method ofclaim 22 wherein trafficking media comprises: serving banneradvertisements created by the advertiser for publication by thepublisher.
 24. The method of claim 21 further comprising: establishing acommission based on the contract.
 25. The method of claim 21 whereinestablishing a commission comprises: establishing a commission based ona number of impressions of advertiser creative served.
 26. The method ofclaim 24 wherein establishing a commission comprises: establishing acommission based on a number of click-throughs.
 27. The method of claim24 wherein establishing a commission comprises: establishing acommission based on a number of leads.
 28. The method of claim 24wherein establishing a commission comprises: establishing a commissionbased on a number of post-click-through actions of a consumer.
 29. Themethod of claim 24 wherein establishing a commission comprises:establishing a flat rate commission.
 30. The method of claim 24 whereinestablishing a commission comprises: establishing a percentage ratecommission.
 31. The method of claim 24 wherein establishing a commissioncomprises: receiving data defining the commission from one of theadvertiser and the publisher.
 32. The method of claim 24 furthercomprising:
 33. An online media exchange method comprising: receivingfrom one or more advertisers data defining offers to sell advertisingmedia; receiving from one or more publishers data defining bids topurchase advertising media; matching an offer to sell of a contractingadvertiser with one or more bids to purchase of respective contractingpublishers to form respective contracts; and serving advertising contentincluding advertising media defined by the contract to consumersaccessing websites of the respective publishers.
 34. The method of claim33 further comprising: storing data about the offers, the bids andmatched offers and bids for subsequent retrieval.
 35. The method ofclaim 34 wherein storing data comprises at least one of: storing dataabout event types defined for received offers and bids, storing dataabout conversion ratios for received offers and bids, storing data aboutevent counts for received offers and bids.
 36. The method of claim 33further comprising: receiving one of revised offer information modifyingthe data received defining an offer to sell; and revised offerinformation modifying the data received defining a bid to purchase. 37.The method of claim 33 wherein receiving data defining offers to sellcomprises receiving from the one or more advertisers information aboutone or more of creative, a product offer, a flight time, a maximumpay-out amount, a compensation amount, a per click payment amount, a perdownload payment amount, and a publisher content description.
 38. Themethod of claim 33 wherein receiving data defining bids to purchasecomprises receiving from the one or more publishers information aboutone or more of creative properties, a minimum acceptable incentivelevel, a minimum effective cost per thousand impressions (CPM), andminimum expected flight duration.
 39. The method of claim 33 whereinmatching an offer to sell with one or more bids to purchase comprises:filtering the offer to sell against requirements of the bids of the oneor more publishers.
 40. The method of claim 33 further comprising:reporting to advertisers and publishers data about received offers andreceived bids.
 41. The method of claim 33 further comprising:determining an effective cost per thousand impressions (ECPM) for atleast one of advertiser offers and publisher bids.
 42. The method ofclaim 41 wherein determining the ECPM comprises: determining ECPM as aratio of value of the advertising media to number of impressions of theadvertising content served
 43. The method of claim 42 wherein matchingthe offer to sell with the one or more bids to purchase comprisescomparing ECPM for the offer to sell with ECPM for the one or more bids.44. The method of claim 41 wherein determining ECPM comprises:determining past ECPM based on observed activity.
 45. The method ofclaim 44 wherein determining past ECPM comprises determining ECPM basedon stored data defining compensation levels for matched offers.
 46. Themethod of claim 41 wherein determining ECPM comprises: determiningfuture ECPM based on observed one of historical event counts andconversion ratios, and current incentive levels.
 47. The method of claim41 wherein determining ECPM comprises: determining future ECPM as aratio of a predicted value and number of impressions delivered.
 48. Themethod of claim 47 further comprising: determining predicted value as asum of products of current incentive levels and historical event countsover all event types.
 49. A method for trading advertising media, themethod comprising: a. providing an exchange data structure accessiblevia a communications network; b. storing in said data structure datadefining an offer to sell advertising media, said data defining aselling compensation scheme which uses a consumer action as a variableinput to calculate compensation payable to purchase said advertisingmedia; c. storing in said data structure data defining an offer topurchase advertising media, said data defining a purchasing compensationscheme which uses a consumer action as a variable input to calculatecompensation payable to purchase said advertising media; d. comparingsaid offer to sell and said offer to purchase, to identify whether saidoffer to purchase meets the terms of said offer to sell.
 50. The methodof claim 49, further comprising: e. storing data defining advertisingcontent to be presented in said advertising media; and f. publishingsaid advertising content data on said advertising media if said offer topurchase meets the terms of said offer to sell.
 51. The method of claim50, further comprising: g. measuring said consumer action.
 52. Themethod of claim 49, further comprising: e. calculating the effectivecost per thousand for said offer to purchase or said offer to sell, andoutputting said effective cost per thousand.
 53. The method of claim 49,wherein said offer to purchase is revocable at will.
 54. A method forpublishing information on the current market value of media, the methodcomprising: a. providing an exchange data structure accessible via acommunications network; b. storing in said data structure data definingan offer to sell advertising media, said data defining a sellingcompensation scheme which uses a consumer action as a variable input tocalculate compensation payable to purchase said advertising media; c.storing in said data structure data defining an offer to purchaseadvertising media, said data defining a purchasing compensation schemewhich uses a consumer action as a variable input to calculatecompensation payable to purchase said advertising media; d. publishingsaid data defining an offer to purchase or said data defining an offerto sell.
 55. A system for trading advertising media, comprising: a. anexchange data structure accessible via a communications network; b.stored in said data structure, data defining an offer to selladvertising media, said data defining a selling compensation schemewhich uses a consumer action as a variable input to calculatecompensation payable to purchase said advertising media; c. stored insaid data structure, data defining an offer to purchase advertisingmedia, said data defining a purchasing compensation scheme which uses aconsumer action as a variable input to calculate compensation payable topurchase said advertising media; d. means to compare said offer to selland said offer to purchase, to identify whether said offer to purchasemeets the terms of said offer to sell.
 56. The system of claim 55,further comprising: e. stored data defining advertising content to bepresented in said advertising media; and f. means for publishing saidadvertising content data on said advertising media if said offer topurchase meets the terms of said offer to sell.
 57. The system of claim44, further comprising: g. means for measuring said consumer action. 58.The system of claim 55, further comprising: e. a calculator forcalculating the effective cost per thousand for said offer to purchaseor said offer to sell, and an output for outputting said effective costper thousand.
 59. The system of claim 55, wherein said offer to purchaseis revocable at will.
 60. A system for publishing information on thecurrent market value of media, comprising: a. an exchange data structureaccessible via a communications network; b. stored in said datastructure, data defining an offer to sell advertising media, said datadefining a selling compensation scheme which uses a consumer action as avariable input to calculate compensation payable to purchase saidadvertising media; c. stored in said data structure, data defining anoffer to purchase advertising media, said data defining a purchasingcompensation scheme which uses a consumer action as a variable input tocalculate compensation payable to purchase said advertising media; d.publishing means for publishing said data defining an offer to purchaseor said data defining an offer to sell.